(navigation image)
Home American Libraries | Canadian Libraries | Universal Library | Community Texts | Project Gutenberg | Children's Library | Biodiversity Heritage Library | Additional Collections
Search: Advanced Search
Anonymous User (login or join us)
Upload
See other formats

Full text of "North Carolina Register v. 1 no. 7 (10/15/1986)"



RECEIVED 



I 






OCT 17 1986 

UW LIBRARY 



J The 
NORTH CAROLINA 

REGISTER 



IN THIS ISSUE 




EXECUTIVE ORDERS 

ADMINISTRATIVE ORDERS 

FINAL DECISION LETTER 

STATEMENTS OF ORGANIZATION 

PROPOSED RULES 
Administration 
Community Colleges 
CPA Examiners 
Dental Examiners 
Human Resources 
Insurance 
Labor 

Mortuary Science 
NR&CD 
Wildlife Resources 
Office of Administrative Hearings 
State Personnel 
State Treasurer 

FINAL RULES 

Transportation 

LIST OF RULES AFFECTED 

ISSUE DATE: OCTOBER 15, 1986 
Volume 1 • Issue 7 • Pages 416-553 



INFORMATION ABOUT THE NORTH CAROLINA REGISTER AND ADMINISTRATIVE CODE 



NORTH CAROLINA REGISTER 

The North Carolina Register is published monthly and 
contains information relating to agency, executive, legislative and 
judicial actions required by or affecting Chapter I50B of the 
General Statutes. All proposed administrative rules and amend- 
ments filed under Chapter 150B must be published in the Register. 
The Register will typically comprise approximately one hundred 
pages per issue of legal text. 

State law requires that a copy of each issue be provided free 
of charge to each county in the state and to \arious state officials 
and institutions. The North Carolina Register is available by 
yearly subscription at a cost of ninety-five dollars ($95.00) for 
12 issues. 

Requests for subscription to the North Carolina Register should 
be directed to the Office of Administrative Hearings, P. O. 
Drawer 11666, Raleigh, N. C. 27604. Attn: Subscriptions. 



ADOPTION, AMENDMENT, AND REPEAL OF RULES 

An agency intending to adopt, amend, or repeal a rule must 
first publish notice of the proposed action in the North Carolina 
Register. The notice must include a reference to the Statutory 
Authority for the action; the time and place of the public hearing 
and a statement of how public comments may be submitted to 
the agency either at the hearing or otherwise; the text of the 
proposed rule or amendment; and the proposed effective date. 

The Director of the Office of Administrative Hearings has 
authority to publish a summary, rather than the full text, of any 
amendment which is considered to be too lengthy. In such case, 
the full text of the rule containing the proposed amendment will 
be available for public inspection at the Rules Division of the 
Office of Administrative Hearings and at the office of the 
promulgating agency. 

Following publication of the proposal in the North Carolina 
Register, at least 60 days must elapse before the agency may take 
action on the proposed adoption, amendment or repeal. 

When final action is taken, the promulgating agency must file 
any adopted or amended rule with the Office of Administrative 
Hearings. If it differs substantially from the proposed form 
published as part of the public notice, the adopted version will 
again be published in the North Carolina Register. 

A rule, or amended rule, cannot become effective earlier than 
the first day of the second calendar month after the adoption is 
filed. 

Proposed action on rules may be withdrawn by the pro- 
mulgating agency at any time before final action is taken by the 
agency. 



TEMPORARY RULES 

Under certain conditions of an emergency nature, some 
agencies may issue temporary rules. A temporary rule becomes 
effective when adopted and remains in effect for the period 
specified in the rule or 120 days, whichever is less. An agency 
adopting a temporary rule must begin normal rule-making 
procedures on the permanent rule at the same time the temporary 
rule is adopted. 



NORTH CAROLINA ADMINISTRATIVE CODE 

The North Carolina Administrative Code (NCAC) is a 
compilation and index of the administrative rules of 25 state 
agencies and 38 occupational licensing boards. The NCAC 
comprises approximately 15,000 letter size, single spaced pages 
of material of which approximately 359c is changed annually. 
Compilation and publication of the NCAC is mandated by OS. 
150B-63(b). 

The Code is divided into Titles and Chapters. Each state agency 
is assigned a separate title which is further broken down by 
chapters. Title 2 1 is designated for occupational licensing boards. 

The NCAC is available in tw,o formats. 

( 1 ) In looseleaf pages at a minimum cost of two dollars and 
50 cents ($2.50) for It) pages or less, plus fifteen cents 
($0.15) per each additional page 

(2) On microfiche. The microfiche edition is revised semi- 
annual^ ( March and October) and can be purchased for 
forty dollars ($40.00) per edition. Due to the volume 
of the Code, the complete copy can only be purchased on 
microfiche. The NCAC on microfiche is updated 
monthly by publication of a "List of Rules Affected 
which .>ets out rules filed the previous month, the action 
taken, and the effective date of the change. This list is 
published in the North Carolina Register. 

Requests for looseleaf pages of rules or the NCAC on 
microfiche should be directed to the Office of Administrative 
Hearings. 

NOTE 

The foregoing is a generalized statement of the procedures to 
be followed For specific statutory language, it is suggested that 
Articles 2 and 5 of Chapter I50B of the General Statutes by 
examined carefullv. 



CITATION TO THE NORTH CAROLINA REGISTER 

The North Carolina Register is cited by volume, issue, page 
number and date 1:1 NCR 101-201, April 1, 1986 refers to 
Volume 1, Issue 1. pages 101 through 201 of the North Carolina 
Register issued on April 1. 1986. 



North Carolina Register. Published monthly by the 
Office of Administrative Hearings, P. O. Drawer 11666, 
Raleigh, North Carolina 27604, pursuant to Chapter 150B 
of the General Statutes. Subscriptions ninety-five dollars 
($95.00) per year. 

North Carolina Administrative Code Published in 
March and October by the Office of Administrative 
Hearings, P. O. Drawer 11666, Raleigh, North Carolina 
27604, pursuant to Chapter 150B of the General Statutes. 
Subscriptions forty dollars ($40.00) per edition. 



ISSUE CONTENTS 



I. EXECUTIVE ORDERS 

Executive Order 27 
Executive Order 28 



416 
417 



NORTH CAROLINA REGISTER 




Office of Administrative Hearings 
P. 0. Drawer 11666 
Raleigh, NC 27604 
(919) 733 - 2678 



Staff: 

Robert A. Melott, 

Director 
James R. Scarcella, 

Deputy Director 
Molly Mason, 

Codifier of Rules 
Ruby Creech, 

Publications Coordinator 
Mary Fowler, 

Wordprocessor 
Teresa Johnson, 

Wordprocessor 
Tammy Poole, 

Records Clerk 



II. ADMINISTRATIVE ORDERS 
Appointment of 

Margaret Eugenia Rogers . 419 
Appointment of 

Kenneth Wayne Patterson . 420 



III. FINAL DECISION LETTER 

Voting Rights Act 421 

IV. STATEMENTS OF ORGANIZATIONS 

Midwifery Joint Committee . 422 

Nursing 422 

Wildlife Resource 
Commission 422 



PROPOSED RULES 

Administration 
Purchase and Contract . . 423 
State Employees Combined 
Campaign 430 

Community College .... 534 

CPA Examiners 529 

Dental Examiners 533 

Human Resources 

Health Services 434 

Medical Assistance . . . 501 
Medical Care Commission . 433 

Insurance 
Company Operations . . . 503 
Fire and Casualty .... 501 

Labor 
Elevator Division .... 517 

Mortuary Science 534 

Natural Resources and 

Community Development 
Economic Opportunity . . 528 
Environmental Management . 520 

Soil and Water 521 

Wildlife Resources .... 527 

Office of Administrative 

Hearings 
706 Deferral 543 

State Personnel 538 

State Treasurer 
Local Government 529 



VI. FINAL RULES 

Transportation 
Division of Highways 



546 



VII. LIST OF RULES AFFECTED 
Volume 10, No. 7 . . , 
(October 1, 1986) 



548 



VIII. CUMULATIVE INDEX 551 



NORTH CAROLINA REGISTER 
Publication Deadlines and Schedules 
(April 1986 - March 1987) 



Issue 


Last Day 


Last Day 


Earliest 


Earliest 


Earliest 


Date 


for 


for 


Date for 


Date for 


Effective 




Filing 


Electronic 


Public 


Adoption 


Date 






Filing 


Hearing 


by Agency 




04/15/86 


03/25/86 


04/01/86 


05/15/86 


06/14/86 


08/01/86 


05/15/86 


04/24/86 


05/01/86 


06/14/86 


07/14/86 


09/01/86 


06/16/86 


05/27/86 


06/03/86 


07/16/86 


08/15/86 


10/01/86 


07/15/86 


06/25/86 


07/02/86 


08/14/86 


09/13/86 


1 1/01/86 


08/15/86 


07/28/86 


08/04/86 


09/14/86 


10/14/86 


12/01/86 


09/15/86 


08/26/86 


09/02/86 


10/15/86 


11/14/86 


01/01/87 


10/15/86 


09/25/86 


10/02/86 


1 1/14/86 


12/14/86 


02/01/87 


11/14/86 


10/23/86 


10/30/86 


12/14/86 


01/13/87 


03/01/87 


12/15/86 


11/25/86 


12/02/86 


01/14/87 


02/13/87 


04/01/87 


01/15/87 


12/29/86 


01/05/87 


02/14/87 


03/16/87 


05/01/87 


02/16/87 


01/26/87 


02/02/87 


03/18/87 


04/17/87 


06/01/87 


03/16/87 


02/23/87 


03/02/87 


04/15/87 


05/15/87 


07/01/87 



EXECUTIVE ORDER NUMBER 27 



NORTH CAROLINA FUND FOR CHILDREN 
AND FAMILIES COMMISSION 



The Governor's Commission on 
Child Victimization has 
determined that new programs are 
needed to assist, treat and 
rehabilitate victimized children 
and their families. It is 
further made to appear that 
private funds are available to 
sponsor such programs . 

THEREFORE, by the authority 
vested in me as Governor by the 
Constitution and the laws of 
North Carolina IT IS ORDERED: 

SECTION 1 . ESTABLISHMENT 

The North Carolina Fund for 
Children and Families Commission 
is hereby established under the 
Office of the Governor. The 
Commission shall administer the 
North Carolina Fund for Children 
and Families which shall provide 
resources for intervention and 
treatment for victimized 
children and their families. 
The Commission shall be composed 
of five (5) members who will be 
appointed by the Governor to 
serve two (2) year terms plus 
the following three (3) cabinet 
officers or their designees who 
shall serve as cx-officio 
members: Secretaries of the 
Department of Administration, 
Department of Crime Control and 
Public Safety, and Department of 
Human Resources. The Governor 
shall also appoint a Chairman of 
the Commission who, in the 
discretion of the Governor, may 
or may not be a member of the 
Commission. 

SECTION 2. FUNCTIONS 

(a) The Commission shall meet 
regularly at the call of the 
Chairman and may hold special 
meetings at any time at the call 
of the Chairman or the Governor. 

(b) The Commission shall have 
the following duties: 

( 1 ) Act as trustee for the 
North Carolina Fund For 
Children and Families. 

(2) Assess the critical needs 
of victimized children and 
their families. 

(3) Receive gifts, requests 
and devises for deposit and 
investment into the trust 
fund. 

(4) Oversee investment of 
trust fund monies. 

(5) Solicit proposals for 



programs which will be aimed 
at meeting identified 
service needs . 

(6) Establish criteria for 
awarding of grants which 
shall include and emphasize 
the public-private 
partnership concept . 

(7) Fund programs that in 
the discretion of the 
Commission, effectively and 
efficiently treat and 
rehabilitate victimized 
children and their families. 

(8) Present a report to the 
Governor at the end of each 
fiscal year. 

(9) Make recommendations to 
the Governor for statewide 
replication of effective and 
efficient programs. 

(c) The Commission is 
authorized to execute such 
additional documents, including 
trust agreements, as may be 
necessary in order to qualify 
contributions to the Fund as 
charitable donations under the 
Internal Revenue Code of 1954 
and the corresponding sections 
of applicable State law. 



SECTION 3. 



ADMINISTRATION 



(a) A staff consisting of a 
director and other support staff 
may be employed to carry-out the 
duties and responsibilities of 
the Commission. The staff shall 
report directly to the Chairman. 

(b) Members of the Commission 
may be reimbursed for travel and 
subsistence expenses as 
authorized by G.S. 138-5. Funds 
for reimbursement shall come 
from the receipts of the trust. 

(c) The administrative costs 
of the Commission shall be 
provided by the Governor's 
Office. 

(d) All funds administered by 
the Commission shall be subject 
to audit by the State Auditor. 



SECTION 4, 



IMPLEMENTATION AND 
DURATION 



(a) This order shall bo 
effective immediately. 

(b) This commission shall 
dissolve at the pleasure of the 
Governor . In the event of 
dissolution, the assests 
remaining in the fund will be 

to one or more 
which themselves 

as organizations 
described in Sections 501(c)(3) 
and 170(c)(2) of the Internal 
Revenue Code of 1954 or 
corresponding sections of any 
prior or future law, or to the 
Federal, State, or local 



turned over 
organizations 
are exempt 



416 



NORTH CAROLINA REGISTER 



government for exclusive public 
purposes . 

This 8th day of September, 1986. 



EXECUTIVE ORDER NUMBER 28 
PRIVATE DEVELOPMENT BONDS 



WHEREAS, Section 103(n) of 
the Internal Revenue Code 1954, 
as amended, established a 
Federal Volume Limitation upon 
the aggregate amount of Private 
Activity Bonds (also commonly 
referred to as "Industrial 
Development Bonds" ) , the 
interest upon which is exempt 
from federal income taxation, 
and 

WHEREAS, pursuant to powers of 
the Internal Revenue Code, a 
prior Governor of the State of 
North Carolina issued Executive 
Order 113 to establish one state 
wide Resource of the Federal 
Volume Limitations on "Private 
Activity Bonds" and to establish 
that the Resource be managed by 
the North Carolina Department of 
Commerce, and 

WHEREAS, this Resource has 
been managed so that the system 
represents a major advantage in 
the effort to locate new and 
better jobs in industry, and 

WHEREAS, this Resource has 
been managed so that existing 
industry has been assured that 
they could finance their 
expansions and create new and 
better jobs with Industrial 
Revenue Bonds, and 

WHEREAS, this Resource has 
also been adequate to finance 
the needs of North Carolina's 
airports, its student loan 
program, and municipal downtown 
development projects, and 

WHEREAS, the United States 
Congress currently has before it 
the Tax Reform Act of 1986, a 
proposed law which will 
establish (1) a new Unified 
Volume Limitation for tax-exempt 
bonds which meet new definitions 
of "private activity" bonds, and 
(2) exact new delineations of 
such bonds to be included under 
these federal limitations as 
"private activity" bonds, and 

WHEREAS, Section 103(n)(6)(B) 
of the Tax Reform Act of 1986 
will require a detailed inquiry 
and study into the ways in which 
North Carolina can best and most 



fairly manage and utilize this 
Resource , 

NOW, THEREFORE IT IS HEREBY 
ORDERED : 

SECTION 1 . DEFINITIONS 

For the purposes of this 
order, terms will be defined as 
follows : 

"Code" shall mean the 
Internal Revenue Code of 1954, 
as amended . 

"Committee" shall mean the 
Interim Private Activity Bond 
Allocation Committee to be 
formed under this order. 

"Issuer" shall mean the entity 
authorized to issue Private 
Activity Bonds, except that in 
the case of Private Activity 
Bonds issued pursuant to Article 
22 of Chapter 160A of the 
General Statutes of North 
Carolina, or issued solely 
pursuant to regulations, rules, 
procedures or rulings of the 
Internal Revenue Service of the 
United States, "Issuer" shall 
mean the municipal corporation 
which approved the issuance of 
the bonds pursuant to such 
regulations, rules, procedures 
or rulings . 

"Private Activity Bonds" shall 
have the meaning set forth in 
Section 103(n)(7) of the Code 
and any successor provision. 

"Unified Volume Limitation" 
shall mean the total Bond Volume 
Limitation measured by the 
formula prescribed in federal 
legislation . 

SECTION 2. 

The "Interim Private Activity 
Bond Allocation Committee" is 
hereby formed. Howard Haworth, 
Secretary of the Department of 
Commerce, Charles C. Cameron, 
Executive Assistant to the 
Governor for Budget and 
Management, and Harlan E. 
Boyles, Treasurer of the State 
of North Carolina, shall 
constitute the membership of the 
committee. Secretary Haworth 
shall serve as Chairman. Each 
shall serve at the pleasure of 
the Governor and any vacancy may 
be filled by his appointment. 
The Committee is to (1) prepare 
for, and lead efforts in, 
studying the ways in which the 
State can best use this valuable 
resource, and (2) deliver to me 
within 45 days after enactment 
of the Tax Reform Act of 1986 
the summary of those studies 
along with a recommendation for 
a course of action. In 
conducting this study, the 



NORTH CAROLINA REGISTER 



417 



Committe shall seek to indent if y 
all of those bond issuers to be 
affected by such legislation. 
As of this date, it is believed 
that this group of private 
activity bonds and Interested 
Advisors to those issuers will 
include : 

NC Agricultural Finance Agency 
NC Association of County 

Commissioners 
NC Downtown Developers 

Association 
NC Educational Assistance 

Authority 
NC Health Services Division 
(Soil & Hazardous Waste 
Section) 
NC Housing Commission 
NC Housing Finance Agency 
NC Industrial Developers 
Association 
Eastern NC Industrial 

Developers Association 
Western NC Development 
Association 
NC League of Municipalities 
NC Local Government Commission 
NC Department of Natural & 
Economic Resources 

(Mainstreet Program) 
NC Municipal Power Agency #1 
NC Eastern Municipal Power 

Agency 
NC State Ports Authority 
NC Utilities Commission 
The Committee shall request a 
statement from each issuer 
regarding its application for 
and its justification for 
specific volume capacity 
allocations for each of the 
years of 1986, 1987, 1988 and 
1989. As part of its 
deliberations, the Interim 
Private Activity Bond Allocation 
Committee shall prepare 
estimates of year by year Bond 
Volume demand and submit those 
estimates to various interested 
parties, including the 
Lieutenant Governor and the 
Speaker of the House of 



Representatives for comment and 
recommendations as to how the 
State of North Carolina can (1) 
set priorities for allocations 
of capacity, and (2) provide for 
complete utilization of the 
total resource. Final 
recommendations to the Governor 
from the committee shall be 
directed toward (a) the 
immediate opportunity to 
completely use or "set aside" 
remaining elements of the 1986 
resource by December 15, 1986, 
and (b) toward the design and 
implementation of the long term 
program for dealing with the 
volume capacity for the years of 
1987, 1988 and 1989. 

SECTION 3. 

So as to provide for the 
orderly and prompt issuance of 
bonds over the next several 
days, weeks and months, the 
Committee, or its designee, 
shall issue allocations of 
capacity within volume 
limitations and definitions set 
up under federal legislation and 
continue to issue such 
allocations or capacity until 
such time as the Governor shall 
issue a detailed Executive Order 
as regards the use of this 
resource. Any allocation issued 
to comply with Section 103(n) of 
the Internal Revenue Code of 
1954, as amended, shall be 
an allocation made 
Tax Reform Act of 
under any future 
Order from this 



considered 
under the 
1986, and 
Executive 
office . 



SECTION 4. 

This Executive Order shall 
become effective immediately. 

This 23rd day of September 1986. 



418 



NORTH CAROLINA REGISTER 



ADMINISTRATIVE ORDER 

STATE OF NORTH CAROLINA 

Office of Administrative Hearings 



TO ALL TO WHOM THESE PRESENTS SHALL COME - GREETING: 

I, Robert A. Melott, Reposing special trust and confidence in the 
integrity and knowledge of MARGARET EUGENIA ROGERS now, by virtue of 
the authority vested in me by law I do hereby appoint her 
Administrative Law Judge and confer upon her all of the rights, 
privileges and powers useful and necessary to the just and proper 
discharge of her duties. 

In Witness Whereof, I have hereunto signed my name and affixed the 
Seal of the Office of Administrative Hearings of the State of North 
Carolina, at Raleigh, North Carolina, this the 15th day of September 
1986. 

s/Robert A. Melott 

Chief Administrative Law Judge 

Director 



NORTH CAROLINA REGISTER 419 



STATE OF NORTH CAROLINA 
Office of Administrative Hearings 



TO ALL TO WHOM THESE PRESENTS SHALL COME - GREETING: 

I, Robert A. Melott, Reposing special trust and 
confidence in the integrity and knowledge of KENNETH WAYNE PATTERSON 
now, by virtue of the authority vested in me by law I do hereby 
appoint him Administrative Law Judge and confer upon him all of the 
rights, privileges and powers useful and necessary to the just and 
proper discharge of his duties. 

In Witness Whereof, I have hereunto signed my name 
and affixed the Seal of the Office of Administrative Hearings of the 
State of North Carolina, at Raleigh, North Carolina, this the 1st day 
of October 1986. 

s/Robert A. Melott 

Chief Administrative Law Judge 

Director 



420 NORTH CAROLINA REGISTER 



VOTING RIGHTS ACT FINAL DECISION LETTER 



[G.S. 120-30. 9H, effective July 16, 1986, requires that all letters 
and other documents issued by the Attorney General of the United 
States in which a final decision is made concerning a "change 
affecting voting" under Section 5 of the Voting Rights Act of 1965 be 
published in the North Carolina Register.] 

U.S. Department of Justice 
Washington, D.C. 20530 

WBR:SSC=YR:gmh 
DJ 166-012-3 
P9955 
R021 1-0217 



September 15, 1986 

Michael Crowell, Esq. 
Tharrington, Smith & Hargrove 
P. 0. Box 1151 
Raleigh, North Carolina 27602 

Dear Mr. Crowell: 

This refers to the September 2, 1986, Resolution of the North 
Carolina State Board of Elections which provides for the procedures 
for the election of the seven members of the Onslow County Board of 
Education in Onslow County, North Carolina, submitted to the Attorney 
General pursuant to Section 5 of the Voting Rights Act of 1965, as 
amended, 42 U.S.C. 1973c. We received your submission on September 3, 
1986. In accordance with your request, expedited consideration has 
been given this submission pursuant to the Procedures for the 
Administration of Section 5 (28 C.F.R. 51.32). 

The Attorney General does not interpose any objections to the 
changes in question. However, we feel a responsibility to point out 
that Section 5 of the Voting Rights Act expressly provides that the 
failure of the Attorney General to object does not bar any subsequent 
judicial action to enjoin the enforcement of such changes. In 
addition, as authorized by Section 5. the Attorney General reserves 
the right to reexamine this submission if additional information that 
would otherwise require an objection comes to his attention during the 
remainder of the sixty-day review period. See also 28 C.F.R. 51.42 
and 51 .48. 

We note that the Resolution provides that the 
Executive/Director of the State Board of Elections may authorize 
additional changes that may be required to hold elections according to 
the schedule now before us. Any changes in voting adopted as a 
result of this provision will be subject to the preclearance 
requirements of Section 5. 28 C.F.R. 51.14. 

Sincerely, 

Wm . Bradford Reynolds 
Assistant Attorney General 
Civil Rights Division 



By: 



Gerald W. Jones 
Chief, Voting Section 



NORTH CAROLINA REGISTER 



421 



STATEMENT OF ORGANIZATION 

NORTH CAROLINA BOARD OF NURSING 

"The North Carolina Board of 
Nursing licenses registered 
nurses and licensed practical 
nurses; regulates the practice 
of nursing; approves educational 
units leading to licensure; 
issues interpretations of the 
Nursing Practice Act, and 
maintains a joint subcommittee 
with the North Carolina Board of 
Medical Examiners for matters 
relating to the performance of 
medical acts by registered 
nurses . 

All meetings of the Board, 
including Board committee 
meetings, are open to the 
public. Persons wishing to 
bring matters to the Board for 
its attention or consideration 
shall submit the request in 
writing no less than 30 days 
prior to the scheduled regular 
meeting. The Board office is 
located at 706 Hillsborough 
Street, Raleigh, NC 27603; 
mailing address is P . 0. Box 
2129, Raleigh, NC 27602." 

MIDWIFERY JOINT COMMITTEE OF 
THE STATE OF NORTH CAROLINA 

"Midwifery Joint Committee 

administers the provisions of 

Article 1 0A "Practice of 

Midwifery" by the approval of 

nurses to practice midwifery in 
North Carolina and by regulation 
of that practice. 

All meetings of the Midwifery 
Joint Committee are open to the 
public. Persons wishing to 
bring matters to the attention 
or consideration of the 
Midwifery Joint Committee may 



write the Midwifery Joint 
Committee, P. 0. Box 2129, 
Raleigh, NC 27602." 

NORTH CAROLINA 
WILDLIFE RESOURCES COMMISSION 

The North Carolina Wildlife 
Resources Commission is, as a 
matter of executive 
organization, a part of the 
Department of Natural Resources 
and Community Development, but 
operates independently of the 
Department except for the 
management functions of 
coordinating and reporting. 

The Commission consists of 
thirteen (13) members: nine of 
which are appointed by the 
Governor from the wildlife 
districts, two by the Governor 
from the State at-large, and two 
by the General Assembly on 
recommendations of the President 
of the Senate and the Speaker of 
the House, respectively. 

The administrative head of the 
agency is its Executive Director 
who is selected by and serves at 
the pleasure of the Commission. 
The staff of the Commission, 
other than personnel serving 
directly under the Executive 
Director, is organized into five 
divisions as follows: 

(1) Administrative Services; 

(2) Conservation Education; 

(3) Enforcement; 

(4) Boating and Inland 
Fisheries; and 

(5) Wildlife Management. 

The public may obtain 
information and make submissions 
and requests to the Wildlife 
Resources Commission by 
communicating with the agency by 
mail or in person at 512 N. 
Salisbury Street, Raleigh, North 
Carolina 27611, or by telephone 
at (919) 733-3391 . 



422 



NORTH CAROLINA REGISTER 



PROPOSED RULES 

TITLE 1 - DEPARTMENT OF 
ADMINISTRATION 

Notice is hereby given in 
accordance with G.S. 150B-12 
that the Department of 
Administration intends to adopt 
regulation cited as 1 NCAC 5B 
.0810; amend regulations cited 
as 1 NCAC 5A .0001 through 



.0004, 


.0009, 5B .0206, 310, 


through 


.0311; .0402, .0404, 


. 1402, 


through .1403, .1506, 


. 1509, 


.1510, .1512, .1513, 


. 1601 , 


.1603, .1903, 5D .0204, 


.0206, 


.0207, .0401, .0501, 


.0504, 


.0505; and repeal 


regulat 


Lons cited as 1 NCAC 5B 


.0809, 


.1801, .1802, .1902, 


.1904, 


1905, and .1908. 



The proposed effective date of 
this action is February 1, 1987. 

Statutory Authority: G.S. 
143-48 through 143-60; 143-169; 
143-170.1; 143B-10(f). 

The public hearing will be 
conducted at 10:00 a.m. on 
November 18, 1986 at Advisory 
Budget Commission Conference 
Room, 5th Floor, Administration 
Building, 116 W. Jones Street, 
Raleigh, North Carolina 27611. 

Comment Procedures i Any 
interested person may present 
his or her views and comments 
either in writing prior to or at 
the hearing or orally at the 
hearing. Any person may request 
information, permission to be 
heard or copies of the proposed 
regulations by writing or 
calling Betsy Watson at 
733-3241 . 

CHAPTER 5 - PURCHASE AND 
CONTRACT 

SUBCHAPTER 5A - DIVISION OF 
PURCHASE AND CONTRACT 

.0001 RESPONSIBILITY 

The Department of 
Administration is respons: 
for administering the stai 
program for the acquisition 
management and disposi t ion 
personal property, 
administration of this pro; 
is the responsibility of 
State Purchasing Officer 
reports to the Secretary of 
Department of Administration. 

.0002 SCOPE 

The program administered 
by the Division of Purchase and 
Contract includes the following 
where public funds are involved: 



(1) acquisition by purchase, 
exchange, lease-purchase, 
lease or rental of equipment, 
materials, supplies, printing 
and services by all state 
departments, institutions, 
authorities, boards, 
commissions and agencies; 

(2) acquisition by purchase 

or exchange of all 
equipment, materials and 
supplies by city and county 
boards of education, 
community colleges and 
technical institutes; 

(3) making certain services 
available to charitable 
nonprofit hospitals, fire 
departments and rescue 
squads ; 

(4) establishment and 
enforcement of purchase 
specifications; 

(5) inspection and testing of 
products . 

-(-64 t ransfer , e xchang e o-f 

sal e o-f aii surplus 
e quip me nt , m a t erials and 
supplies b e longing -bo s t a te 
go vernmen t and , und er cer t ain 
c o ndi t ions , -the exchange or 
sale o-f surplus equipm e nt , 
ma t erials arrd supplies by 
l oc al b oards o-f e duca t ion ami 
t+te sale o-f surplus prop e r t y 
by c om m uni t y c oll e ges and 
te chnical insti t u t e s ; 

-f J 7-)- supervision of inv e n t or i e s 
o-f agencies o-f s t a t e 



.0003 ORGANIZATION 

The administrative head of the 
Division of Purchase and 
Contract is the State Purchasing 
Officer. The division is 
organized into sections 
in c ludin g for purchasing, office 
of administration, data 
processing and standards and 



inspection arrd surplus pr ope r t y 
arrd inven to ry management . The 
State Purchasing Officer may 
delegate authority to his 
assistants as he deems 
appropriate . 

.0005 RULE-MAKING AUTHORITY 

The basic authority for 
establishing rules and 
regulations governing the 
operation of the Division of 
Purchase and Contract is vested 

in the Secretary of 

Admini strat ion after 

consultation with the Advisory 
Budget Commission. This 
authority includes rules 
relating to the canvass of bids 
and award of contracts, 
obtaining competition on small 
purchases, defining contractual 
services, delegations of 
purchases, waiver of competitive 



NORTH CAROLINA REGISTER 



423 



bidding, making partial or 
multiple awards, purchases of 
used goods, rejection of bids, 
confidentiality, making 

purchases jointly with other 
units of government, encouraging 
the purchase of North Carolina 
products and other rules and 
regulations as may be 
appropriate. Such r ul es may be 
mo d trf-red or- chang e d by maj or i ty 
v o t e of t he com missi o n and ar e 
sub mi t t e d t-o t h e A tt orney 
General -for opini o n *rs to t h e ir 
l eg al e ff ect ■ Such rules and 

regulations shall become 

effective in accordance with the 
provisions of Chapter 150B of 
the General Statutes , 

The Secretary of 
Administration is authorized to 
adopt rules and regulations — 
wi t h approval o-f after 
consultation with the advisory 
Budget Commission, covering the 
following purposes: re quiring 
inv e n to ry reports -from s t a te 
agencies, p re scribing inven t ory 
procedures , prescribing the 
manner of inspections and tests 
of products before and after 
delivery, prescribing the manner 
of purchases in emergencies, 
prescribing the manner in which 

pass e nger vehi cles s hall be 

purchased , providing for other 
matters to give effect to 
applicable law and rules and 
prescribing procedures for 
acquiring goods from other 
governmental units. 

The statutes, rules, procedures 
and practices applicable to and 
followed by the Division of 
Purchase and Contract are 
considered to be for the purpose 
of furthering the public 
interest. In this context, the 
public interest is paramount to 
that of any individual, agency, 
vendor, group or special 
interest. These rules and 
procedures are to be construed 
and interpreted accordingly. 

.0009 BOARD OF AWARD 

The Advisory Budget Commission 
designates two or more members 
to serve as a Board of Award for 
canvassing bids and awarding 
co n t rac t s and fur t h e r designa te s 
c er t ain sta te cm p l uye et who can 
s erv e -in this c apa c i t y -in the 
absenc e o-f m e mber ( s ) of the 
c ommissi o n . r ecommending the 



Secretary 



of 



State ; 



Representative from Attorney 



award of 


contrac 


ts to the 


Secretary 


of Administration. 


The C 


ommiss ion 


further 


designates 


the following state 


employees 


who can s 


erve in this 


capacity 


in the 


absence of 


member ( s ) 


of the 


Commission : 


Controller 


, State 


Board of 


Educat ion ; 


State 


Treasurer ; 



General ' s 



Office; 



all 



departmental secretaries with 
the exception of the Secretary 
of Administration. These 



alternate members shal] 



not 



further 



delegate 



this 



responsibility. The board 
normally meets weekly. 

Bids are reviewed only by the 
Division of Purchase and 
Contract, arrd th e Advisory 
Budget C o mmis s i o n or its 
design e es ■ the Board of Award 

and the Secretary of 

Administration . Records are 
kept of each meeting and made 
public by the State Purchasing 
Officer. Any o n e desiring to be 
heard b e for e the S e cr et a r y or 
■the S t a te Purchasing Offic er and 
the commission for the pur pose 
of r e viewing an award of similar 
decisi o n may petition the 
Secre t ary of Ad m inistration as 
p r o vid e d -in + HBAB +Br 

SUBCHAPTER 5B - PURCHASE 
PROCEDURES 

SECTION .0200 - SPECIFICATIONS 

.0206 SUBMISSION FOR ADOPTION 

Upon completion of all 
necessary studies, reviews and 
drafts, any proposed standard 
specification is submitted to 
the Gtandardizat ion commi tt e e 
Stat e Purchasing Officer for 



consi 

to 

Admin 

speci 

stand 

to st 

stand 

modif 

Purch 

inter 

neces 

such 

c om m i 



deration and recommendation 
the Secretary of 
istration. When a 
fication is adopted as a 
ard, it becomes applicable 
ate purchases generally. A 
ard specification may be 
ied by the Division of 
ase and Contract on an 
im basis as deemed 
sary or advantageous until 



time as the s t andardiza t ion 



ttee 



Secretary 



of 



Administration can consider the 
proposed revision. 

SECTION .0300 - ADVERTISED 
(FORMAL) BID PROCEDURE 

.0310 ADVERTISED PROCUREMENTS 
Advertised procurements are 
awarded under procedures 
established by the Secretary of 

Administration after 

consultation with the Advisory 
Budget Commission. Whi c h 
d e signa te s t wo or mor e of its 
memb e r , or n o n m em b er d e sign ee s . 
to serve as two or* more of its 
members. , or n o n membe r 
designees , to serve as a Doard 
of Award -H- Nfrte 5A .000 9 ) in 
canvassing bids and awarding 
contrac t s . After contracts are 



424 



NORTH CAROLINA REGISTER 



awarded, successful bidders are 
notified by letter of acceptance 
or by purchase order as 
appropriate . 

.0311 GOODS REQUIRING 

IMMEDIATE ACCEPTANCE 

In the purchase of items which 
are subject to rapid price 
fluctuation or immediate 
acceptance, the State Purchasing 
Officer may award contracts as 
he deems advisable provided that 
each such action is made a 
matter of record and reported 
promptly to the Advis or y Bttd-gc-t 
C o mmission Board of Award. 

SECTION .0400 - INFORMAL 
PROPOSALS (QUOTATION) PROCEDURE 

.0402 REVIEW BY BOARD OF AWARD 

AND SECRETARY OF 

ADMINISTRATION 
The customary review and award 
procedure is not a requirement 
in acting on proposals which do 
not follow the formal 
advertising bidding procedure (1 
NCAC 5B .0300). However, any 
controversial matters or 
questions of policy which might 
be involved in informal 
purchases are reviewed for 
decision with the Board of Award 
and Secretary of Administration. 

.0404 DELEGATIONS 

Purchases may be made directly 
by all state agencies which are 
authorized to issue their own 
purchase orders and by community 
colleges, technical institutes 
and public school administrative 
units, up to the dollar limit 
authorized by the division for 
each agency, under the quotation 
procedure in Rule .0401 of this 
Section. Such purchases can be 
made by general delegation. 

A general delegation is an 
authorization made by 
Division of Purchase 
Contract to an agency for 
purchase of all equipment, 
materials and supplies not 
covered by state contracts and 
costing less than the dollar 
limit authorized by the division 
for the agency. In the case of 
similar and related items and 
groups of items, the maximum 
dollar limit authorized by the 
division applies to the total 
cost rather than to the cost of 
any single item, 
may not, however 
bring them 
provision . 

R e quir e men t s irt the cos t rang e 
betwe e n t h e maximum d o llar limi t 
atrtr h o rized by the divisi o n for 
■Hto agency and five th o usand 
dollars (05,000) mtrs* be 



the 
and 
the 



Requirements 
be divided to 
within this 



to -the Division of 
Purchase and Con t ract -in one of 
■two ways : normally, the 
s t anda r d r eq uisi t ion f o rm and 
procedures may be used 
alternatively , -the a ge ncy 
may obtain competitive 
quo t a t i o ns direc t ly from 
r e s p onsible so ur c es of supply 
and s e nd these -to -the division 
for irt-s r eview and, -if found -to 
be -rn good o rd e r, approval . 
Purchases by an agency of 
materials necessary for repairs 
or alterations, if to be used or 
furnished by that agency, should 
bo made in the same manner as 
any other purchases. 



SECTION .0800 



PRINTING 



.0809 



MULTI-COLOR PROCESS 
PRINTING (REPEALED) 



.0810 STATEMENT OF COST OF 
PUBLIC DOCUMENTS 

Every agency, when publishing 
a public document that is not 
for the principle purpose of 
sale to the public, shall cause 
a statement as to the number of 
copies printed, total direct 
reproduction cost, and the cost 
per copy to be placed by the 
agency name . 

SECTION .1400 - WAIVER OF 
COMPETITIVE BIDDING 

.1402 DOCUMENTATION 
Although competitive bidding 
may be waived for proper cause, 
its use is required wherever 
practicable; and further, where 
waiver is contemplated, except 
for small purchases, the 
reason(s) therefore must be 
documented, and be reviewed as 
in a canvass of bids. and be 
subjec t -co strch approval as "the 
Advis o ry D u d get Commission may 
desi re . 

.1403 DATA PROCESSING HARDWARE 
AND SOFTWARE 

If competitive bidding is 
waived in the acquisition of 
data processing hardware and 
software, a written explanation 
is required from the using 
agency together with written 
comments and advice from the 
Director of the Division of 
State Management Gy s t eins 
Information Processing Services 
and, where accounting functions 
are involved, the State Auditor. 
These expressions are given due 
consideration by the State 
Purchasing Officer for any 
recommendation he presents to 
the Board of Award and Secretary 
of Administration. in eve n t 
agr e em e n t cannot be r e ach e d 



NORTH CAROLINA REGISTER 



425 



be t w ee n -the using ag e n c y, -Hre 
Division tri P ur chas e ami 
Con t rac t and or- -the Doard o-f 
Av r a rd, t he ma tt er is referred -to 
t h e Chairman o-f t he Advisory 
B u d get C u jmui * >s.i o n ^or fur t h e r 
c o ns i J e r at ion . 

SECTION .1500 - MISCELLANEOUS 
PROVISIONS 

.1506 CONDITIONAL GRANTS: 

ETC. IN PUBLIC 

PURCHASING 
Where a grant, donation or 
special discount is predicated 
upon making a purchase from the 
grantor, the proposed 
transaction is fully documented 
and is to have prior approval of 
the Advisory Dudg et C o mmis s i o n 
Secretary of Administration. 

.1509 PURCHASING FROM OR 

THROUGH STATE EMPLOYEES 

Every reasonable effort is 
made to avoid making purchases 
from or through employees of 
state government or any of its 
agencies or of public school 
administrative units. Any 
instances which may develop of 
doing business with such 
personnel are reported to the 
Advis o ry Budge t C o mmissi o n 
Secretary of Administration for 
action as ire d ee ms deemed 
appropriate . 

.1510 USE OF STATE PURCHASING 
POWER FOR PRIVATE GAIN 

The purchasing power of the 
state is not to be used for 
private advantage or gain. 
Purchases under contracts made 
by the state , except those in 
accordance with G.S. 145-58.1, 
are not to bo allowed for 
personal use out of private 
funds nor are agencies or 
institutions to place orders for 
acticles for ownership by 
employees or other individuals. 

.1512 AVAILABILITY OF SERVICES 
TO CERTAIN NON-STATE 
AGENCIES 
The Division of Purchase and 
Contract makes purchasing 
services available to charitable 
nonprofit hospitals, local 
nonprofit community sheltered 
workshops , political 

subdivisions, volunteer fire 
departments and rescue squads. 
Such services are limited to the 
expenditure of public funds and 
are rendered under rules and 
regulations adopted by the 
Advisory Budget Commission. 
Services to volunteer fire 
departments and rescue squads 
concern only gasoline, oil and 
tires . 



Advisory Budget Commission 
rules provide that the services 
be made available in a gradual, 
orderly and effective manner. 
Necessarily, this is affected by 
budgetary allowances for 
personnel, time and related 
costs . 

The division inquires 
periodically among hospitals and 
political subdivisions of the 
state to determine the types of 
items available from state term 
contracts for which they would 
want the division to contract 
for them. Based on this 
information, the division 
develops and implementing 
schedule of items together with 
the times for handling them and 
the methods of purchasing or 
contracting. The division has 
final decision as to items 
included on the schedule. 

Any hospital or subdivision 
may elect individually to 
participate in the purchase of 
any particular items or groups 
of items provided in the 
schedule in the following 
manner: for indefinite quantity 
contracts, by requesting the 
division prior to the invitation 
for bids to include its 
requirements in the next 
invitation; and, when definite 
quantity purchases are handled, 
by requisitioning in the same 
manner as state agencies. 

Where a hospital or subdivision 
elects to participate in a 
contract or purchase, its 
resulting contractual duties, 
obligations and responsibilities 
are the same as those required 
for state agencies and 
inst itut ions . 

Hospitals and subdivisions 
shall make payments to suppliers 
in a timely manner and in 
accordance with the terms of the 
contracts and, for data and 
statistical purposes, shall 
furnish the division a copy of 
each order or release issued 
under such contracts. 

As may be practicable in terms 
of personnel, time and costs, 
the division may offer its 
services, in addition to 
purchasing and contracting, to 
hospitals and subdivisions with 
respect to preparation of 
specifications, contracts for 
services, inspection and testing 
of products, expediting 
deliveries and advising as to 
market conditions. 

.1513 COOPERATIVE PURCHASING 

Where an agency of the state 

or school administrative unit is 

a participant in an authorized 

cooperative project with another 



426 



NORTH CAROLINA REGISTER 



governmental activity or with a 
charitable non-profit 

corporation, goods and services 
necessary to the project shall 
be acquired according to the 
state's customary procedures; 
provided, however, that if the 
interest of the state would be 
served by making acquisition on 
behalf of such governmental 
activity or corporation, or by 
authorizing acquisition on the 
state's behalf under the 
provision of Article 8 of 
Chapter 143 of the General 
Statutes, the State Purchasing 
Officer may do so with prior 
approval of the Advisor y Dudg et 

Commissi o n Secretary of 

Administration ■ 

SECTION .1600 - EXEMPTIONS: 
EMERGENCIES AND DELEGATIONS 

.1601 EXEMPTIONS 

Unless directed otherwise by 
the Secretary of Administration, 
wi t h appr ov al vf after 

consultation with the Advisory 
Budget Commission, it is not 
mandatory that published books, 
manuscripts and like material 
and perishable articles such as 
fresh meats be purchased through 
the Division of Purchase and 
Contract. Where such purchases 
are made directly by using 
agencies, however, competitive 
bids are required wherever 
possible . 

The Secretary of Administration 
and the Advisory Budget 
Commission have directed that 
contracts for two such types of 
foods, bakery products and dairy 
products, be awarded through the 
Division of Purchase and 
Contract . 

The printing of Supreme Court 
reports is exempted from 
handling through the Division of 
Purchase and Contract . 

The purchase of liquor is not 
handled through the Division of 
Purchase and Contract . 

.1603 DELEGATIONS 

The State Purchasing Officer 
may authorize any state agency, 
community college, technical 
institute or local board of 
education to purchase directly 
such supplies, materials, 
equipment or services as he may 
designate, provided that; 

(1) Where available, items or 
their functional equivalents 
are obtained in accordance 
with established state 
contracts; 

(2) Items which are purchased 
by schedule are consolidated 
and forwarded to the division 
according to the established 



dates and schedules (monthly, 
quarterly, etc.); 

(3) Agency quotation forms, 
general conditions of 
purchase and purchase order 
forms are subject to approval 
by the division; 

(4) No indefinite quantity 
contracts or price agreements 
are entered into without 
specific prior approval by 
the division; 

(5) Copies of all agency 
purchase orders or like 
information are forwarded as 
requested to the division, 
giving the basis for the 
purchase (state contract, 
local quotation, etc.); 

(6) In all cases, applicable 
legal requirements and good 
purchasing practices are 
followed, including obtaining 
reasonable and adequate 
competition where available 
with quotation made a matter 
of record. 

In such cases, public 
advertisement is not required 
unless made a condition of the 
authorization. Every such 
authorization is in writing, 
made a matter of record and 
subject to approval of the 
Advis o ry Dudg et Com m is s ion 
Secretary of Administration. 
Such delegation cannot be 
contrary to the intent of any 
existing contract for the same 
or similar goods or services. 
Further, while not limited as to 
expenditure, such delegation is 
confined to items and quantities 
which, by their nature or 
circumstance such as 
perishableness , transportation 
costs, local conditions or local 
availability, would result in 
handling by the Division of 
Purchase and Contract serving no 
practical purpose. 

The Division of Purchase and 
Contract, in its discretion, may 
require that proposals received 
under such delegations be sent 
to it for determination of the 
successful bidder. 

Approval of purchases by 
public school administrative 
units as provided under General 
Statute 1 1 5~522 is based upon 
purchases being made in 
accordance with the provisions 
of Article 3 of Chapter 143. 

The Division of Purchase and 
Contract periodically reviews 
its delegations of purchase to 
ascertain the availability of 
these supplies, materials, 
equipment or services and their 
continued suitability for 
delegation. 



NORTH CAROLINA REGISTER 



427 



SECTION 



.1800 - INVENTORIES 
AND STORES 



.1801 SUPERVISION (REPEALED) 

.1802 PERSONAL PROPERTY 
INVENTORY PLAN (REPEALED) 

SECTION .1900 - RECORDS OF 
THE DIVISION OF PURCHASE 
AND CONTRACT 

.1902 REQUISITIONS (REPEAL) 

.1904 REQUEST FOR QUOTATIONS 
(REPEAL) 

.1905 GENERAL CORRESPONDENCE 
(REPEAL) 

.1908 PURCHASE ORDERS (REPEAL) 

.1 903 BiD riLES 

Each advertise d invi t a t i o n for 
bids -rs uniquely number e d and 
f xl ed w ith bid icsponscs and 
r e lated inf o rma t i o n im a j acke t . 
Th e file includ e s requisi t ion , 
wo r kshe et , mailin g 1 is t , fcrird 
responses , tabulati o n ox 
abstrac t (where pr e pa re d ) , 
r e la te d c o rresp o nd e n ce arrcrr as 
applicable , a copy of "the 
certification of award -to tire 
successful bidder ( s ) . Exc e pt 
■for any informa t i o n subj ect -to 
■the rule ort co nfiden t iality, tire 
file is o p e n -bo in te r e st e d 
Subject "bo th e 



provision o-f 
copies ox 

needed may bo 
in t er e s te d pr 
re qu e s t , t h e 



N€Ae 5B . 1501 , 
:t in bids are 
any inf or mati o n 
hand co pi ed by 
trorrs-r Upon 
d i vision snaii 
per sons w ith 
suoh mater ial — 



^rtrpp 1 y int? 
trop i cs of 
foll o wing pay me n t o-f r eas o nabl e 
c o sts of p r o vid -ing t+rc 
nra*t e r i a 1 s . D ids are kept on 
file at t h e divisi o n dur ii rg the 
curr e n t y ear . T hereaft e r ■ t h ey 
are availabl e from the state 
records center for a peri o d of 
fotrr y e ars . Did fil es are 
availabl e upon request during 
o ffic e h o urs . 

.1903 FILES 

Each requisition received by 
the Division of Purchase and 
Contract is assigned a unique. 

is 



sequent 



ltial control number an 
placed in a pro m i mb cred folder 



This number then becomes the bid 
or quote num ber a nd the purchase 
number, if one is issued 



ord er 
by the 
All d 
bid o r 
will 



divisi on . 
ocumciyts related to t h 

gj lo te or pu rchase 

be filed in 



pre -m i 
includ 



m bered f older. Tl io 

es the requis it 



worksheet , mailing lists, 



e 

rder 

the 

file 

ion . 

bid 



responses, tabulation, related 

correspondence, and the 

certification of award to the 
s uccessful bidder, as well as 
the purchase order, if one is 
issued by Purchase and Contract . 

Certain information may be 
cla s sified as confidential under 
1 NCAC 5B .0309 during the 
period of evalu a tion , and under 
1 NCAC 5B .1501 as the State 



Purchasing 



Officer 



determine , 
in the 



may 



All other material 



file 



open 



to 



interested persons during normal 
office hours. may be hand 



cop io d, or copies 



will 



be 



fur nished following payment of 
re asonable costs. 

Th c fi les are kept on f i le at 

the Division of Purchase and 



Contract 


for 


a p 


eric 


d 


ot 


one 


year . 


Thereafter , 


th 


cv 


are 


available 


from 


the 


Sta 


te 


Records 


Center f 


or a 


pel 


■iod 


of 


four 



years . 

SUBCHAPTER 5D - CONSULTANTS AND 
CONTRACTUAL SERVICES 

SECTION .0200 - CONTRACTING 
PROCEDURE FOR CONSULTANTS 

.0204 REVIEW OF AGENCY 
REQUESTS 

The documents submitted by 
agencies requesting authority to 
retain consultants will be 
reviewed by the Division of 
Purchase and Contract . Upon 
completion of this review the 
requesting agency will be 
advised, subject to such 
conditions as may be prescribed 
by the Governor or his designee, 
to: 

(1) canvas additional sources 
within state government ; or 

(2) solicit proposals from 
private contractors — s t a te 
a ge n c i e s or b ot h ; or 

(3) execute a negotiated 
contracts(s) without 
competitive proposals if the 
Division of Purchase and 
Contract and the Governor 
have determined that 
performance or price 
competition is not available 
or that the requirement is 
for an authorized cooperative 
project with another 
governmental unit(s) or a 
public or private nonprofit 
organizat ion( s ) or that the 
contract price is too small 
to justify soliciting 
competitive proposals; or 

(4) abandon the project for 
being outside the scope of 
the agency's responsibilities 
or for having insufficient 
benefit to the state relative 



428 



NORTH CAROLINA REGISTER 



to the potential expenditure 
of funds. 

.0206 NEGOTIATED CONSULTANT 
CONTRACTS 
An agency which receives 
authorization to enter into a 
negotiated contract(s) for 
consultant services without 
soliciting competitive proposals 
shall submit the proposed 
contract(s) to the Division of 
Purchase and Contract for review 
and approva l prior to execution. 
Upon completion of this review 
the requesting agency shall be 
notified in writing by the 
Governor or his designee that an 
approved contract (s) may be 
executed by the agency head. 

.0207 CONSULTANT CONTRACT 
MODIFICATION 

Any modification to any an 
approved contract(s) shall be 
subject to the same approval 
requirements as the original 
contract (s). The Governor or 
his designee may at his option, 
during the process or reviewing 
requests for contract 
modifications , waive any of the 
provisions of Rule .0203 of this 
Section . 

SECTION .0400 - CONTRACTING 
PROCEDURE 



.04 

It 
acqu 
serv 



01 GENERAL POLICY STATEMENT 
shall be general policy to 
ire co n t ra c tual s er vi ce s 
ice contracts by seeking 
The final 
authority in 
phase of 
of 



competition . 

decision-making 

regard to any 

procurement or performance 

any con t rac t ual s e r v ic e s ervice 

contract is, and shall remain. 



the State Purchasing Officer or 
the Advisory Bud get C om missi o n 
Secretary of Administration. 
Such authority may be delegated 
to such agencies or individuals 
as they may designate but the 
right is reserved to retract 
such authority at any time as 
either or both may deem it to be 
in the best interest of the 
state. Any contract entered 
into in the name of the state 
and paid for by state funds by a 
state agency, or any state 
employee, or any member of a 
board or commission, which is 
contrary to an applicable rule, 
regulation or these procedures 
shall be void and of no effect. 

SECTION .0500 - COMPETITIVE 
PROCEDURES 

.0501 GENERAL REQUIREMENTS 
After preparation of 



justification and a task 
description, the agency shall 
solicit quotations, bids or 
proposals, from as many sources 
as possible. In order to get a 
better idea of the market, the 
agency should develop and 
maintain an "active bidder's 
mailing list" for each type of 
service. Such bidder's list may 
be compiled from previous 
knowledge, trade journals, lists 
prepared by other state agencies 
including the pur c has e nrrd 
co n t rac t divis ion . Divi r. ion of 
Purchas e and Contract, telephone 
directories, requests by 
vendors , etc . 

Each contractor contacted 
shall be given a copy of the 
task description (or it should 
be read to him for phone 
quotes), as well as any other 
information necessary for him to 
prepare his quotation or 
proposal . Each All contractors 
should shall be given the same 
information given to all other 
contractors, in order that no 
one is given preferential 
treatment, whether intentional 
or not . 

After all quotes or proposals 
are received, the agency shall 
tabulate the results. Each 
contractor's offer should be 
carefully analyzed to ascertain 
compliance with the task 
description, terms and 
conditions. Before the award of 
the contract, the agency should 
make a termination through 
financial statements, 

references, etc., that the 
recommended contractor is 
capable of performing the work 
in a satisfactory manner. 

The agency should prepare the 
proposed contract, or agreement, 
incorporating the task 
description therein. All terms 
and conditions should be such 
that the state's best interests 
are protected. 

.0504 SERVICES COSTING OVER 
FIVE THOUSAND DOLLARS 
The procedure for request 
for proposals (RFP) and 
recommendation for their award 
will be the same as the 
procedures in 1 NCAC 5D .0503 
with the following additions 
after approval by the executive 
officer or his/her 
representative: the 

justification memo, the request 
for proposals, a copy of all 
proposals received, the proposed 
contract, and the requesting 
agency's recommendation for 
award shall be submitted to the 
Purchase and Contract Division 
for its review. After the 



NORTH CAROLINA REGISTER 



429 



contractual service section 
makes its recommendation, all 
required supporting data will be 
submitted to the State 
Purchasing Officer for final 
determination of the successful 
bidder and award of the 
contract . App e als o-f s uch 
decisions way fcre- mad e "to -Htc 
D o ard o-f Awards ■ 

.0505 SINGLE SOURCE SERVICES 
All agencies of the state 
shall make every effort to 
eliminate "sole source 
contracts" whenever possible. 
Competition is the best means 
available to assure that the 
state receives the best service 
at the lowest possible cost . 
Whenever contracting with a sole 
source is inevitable, the agency 

shall obtain approva l f rom the 

Division of Purclnso a n d 



Contract 



to 



negotiate the 
contract with the vendor . Such 
contract (s) shall include a 
break down by the vendor 
itemizing the components of the 
proposed cost. 



Notice is hereby given in 
accordance with G.S. 150B-12 
that the Department of 
Administration intends to amend 
and adopt regulations cited as 1 
NCAC 35 .0101 ; .0103; 

.0202; .0301; .0302; .0303; 
.0403; .0404 and .0407. 

The proposed effective date of 
this action is February 1, 1987. 

Statutory Authority: G.S. 143 
B-10; 147-62. 

The public hearing will be 
conducted at 9:00 a.m. on 
November 20, 1986 at Advisory 
Budget Commission Conference 
Room, Fifth floor, 
Administration Building, 116 W. 
Jones Street, Raleigh, NC 
2761 1 . 

Comment Procedures : Any 
interested person may present 
his or her views and comments 
either in writing prior to or at 
the hearing or orally at the 
hearing. Any person may request 
information, permission to be 
heard or copies of the proposed 
regulations by writing or 
calling Fran Tomlin, Department 
of Administration, 116 W. Jones 
St., Raleigh, NC 27611, (919) 
733-7232. 

CHAPTER 35 - STATE EMPLOYEES 
COMBINED CAMPAIGN 



SECTION .0100 PURPOSE AND 
ORGANIZATION 

.0101 PURPOSE 
The purpose of the State 
Employees combined Campaign is 
to allow state empl oye es the 
op portunity to contribute to 

charitabl e non-partisan 

organiz ations in an orderly and 
uniform process . The 



contributions 



turn 



granted to those charities 



selected 



by 



the 



S.E.C.C. 



A dvisory Committee. 

These regulations apply only 
to those campaigns in which 
employee's are asked to make 
charitable donations using 
payroll deductions as the method 
of payment . 

.0103 ORGANIZATION OF THE 
CAMPAIGN 

The Campaign Organization is 
as follows: 

( 1 ) Chair . Each year the 

governor will appoint a State 
Combined Campaign director 
from one of the Executive 
Cabinet or University 
Administration agencies. The 
director or the director's 
d esigne e will serve as chair 
of the campaign. The 
responsibilities of the chair 
include setting the dates and 
approving the published 
materials for the Combined 
Campaign, and serving as 
chair " of the S.E.C.C. 
advisory committee . 

(2) Statewide Combined 

Campaign Advisory Committee . 
This ongoing committee serves 
as a central application 
point for all charitable 
organizations -th-atr w-irs+t 
ap plyin g to participate in 
the S.E.C.C. and shall 
determine ^ if the applicant 
agencies meet the approved 
criteria listed in Rule .0202 
of this Chapter . The 
committee recommends overall 
policy for the campaign to 
the 0-ffrrc-e o-f Bud get? arrd 

Marnrgcmcrrc Governor , the 

Campaign Director and 



n ee 
The 



essary State agencies. 
Comnittee is composed of 



ten 



Cha 



members appointed by the 
ir . members of the 



committee 



will 



initially 



s_cr 
( 1 ) 



ve staggered terms of o ne 
two (2). and three (3 ) 



cal 
drr, 



en dar years . A random 

wing of 1986 committee 
b c r *s nam os shall 



mem 
d ot 
roembers h ip . 



:ermine 



terms 



of 



As 



each 



mem 
rep 



ber 



term expires. 



the 



lacenont member will serve 



430 



NORTH CAROLINA REGISTER 



three 



calendar 



year 



a ppointment . 

(3) Local Campaign Chair. 

The Governor, if asked by the 
local charitable 

organizations accepted in to 
the Combined Campaign, will 
appoint a representative of 
either state government or 
the University in the area to 
serve as the local chair. 
This person will be 
responsible for forming a 
local advisory committee irf 
needed for volunteer 

recruitment of state 

employees , campaign 

literature approval, and the 
establishment of local goals 
as needed and distribution of 
undesignated funds . 

(4) Master Account. Serves 

as the financial 
administrator for the 
Combined Campaign, and as 
such is responsible for 
receiving reports from the 
local Combined Campaigns; for 
transmitting to each local 
campaign its share of the 
state employees payroll 
deduction funds; and for 
preparing an end of campaign 
report which summarizes all 
fiscal campaign activity 
including local audits. The 
master account is also 
responsible for the printing 
and distribution of the 
pledge form, campaign report 
form, and collection 
envelopes . 

(5) Local Campaign Manager 
Once applications for 
acceptance into the campaign 
have been approved, a list of 
all accepted organizations 
will be prepared by the 
Statewide Combined Campaign 
Advisory Committee and 
distributed to all 
applicants. The 
organizations will decide 
among themselves which agency 
will serve as the local 
campaign manager. For the 
purpose of deciding on the 
manager, the accepted 
agencies will be divided into 
three groups, each of which 
will have one vote. The 
groups will be: 

(a) United Way; 

(b) National Health; and 

(c) Independent Agencies. 
The local campaign manager 

is responsible for the printing 
and distribution of campaign 
literature, the collection of 
pledge reports and envelopes 
from the state agency 
volunteers, the development of 
campaign reports, and the 
forwarding of one copy of each 



payroll deduction pledge to the 
master account. In addition, 
and end-of-campaign report shall 
be sent to the master account 
for inclusion in the required 
fiscal reports . 

Note: A contract between the 
state and the local manager will 
be executed in order to develop 
an acceptable audit trail. The 
contract will allow a reasonable 
charge for campaign expenses to 
be claimed by the local manager. 
This amount will be approved by 
the state . 

SECTION .0200 ELIGIBLE 
ORGANIZATIONS 

.0202 CRITERIA FOR ACCEPTANCE 
Organizations must meet the 
following criteria to be 
accepted as participants in the 
Combined Campaign: 

(1) The organization must be 
licensed to solicit funds in 
North Carolina. 

(2) Must be directed by an 
active Board of Directors, 
which meets regularly and 
whose members serve without 
compensation . 

(3) Have a 501CC3) tax 
exempt status for both the 
IRS and N. C. tax purposes. 

(4) Must prepare and make 
available to the general 
public an annual financial 
report, which is certified by 
an independent public 
accountant . 

(5) If fundraising and 
administrative expenses are 
in excess of 25 percent of 
total revenue, must 
demonstrate to the 
satisfaction of the S.E.C.C. 
that those expenses for this 
purpose are reasonable under 
all the circumstances of the 
case . 

(6) Must certify that all 
publicity and promotional 
activities are truthful and 
non-deceptive . 

(7) Must agree to the 
confidentiality of the 
contributor list, and must 
promise no unauthorized use 
of this list . 

(8) Must permit no payments of 
commission, kickbacks, 
finders fees, percentages, 
bonuses, or overrides for 
fundraising, and permit no 
paid solicitations of the 
public . 

(9) Must have a policy of 
non-discrimination on the 
basis of race, color, 
religion, sex, age, national 
origin or physical or mental 
handicap for clients of the 
agency, employees of the 



NORTH CAROLINA REGISTER 



431 



agency and members of the 

governing board. Ag e n c ies 

w hich have b een o rganized 

a l o n g r e li g i o us lin e s . or 

wlrich a rc orga ni zcc ] -to ser v e 

persons of a prtrt icu 1 or sex 

or rflcc may bo consider ed for 

e ligi bi li t y irf a bona firdc 

purpose for oryaniz ing along 

such 1 mes cnn ho showirr 

(10) Must p rovide b e n e fi t s or 

s e rvices wi t hin tho local 

cum i n unity > meaning t ha t 

e m p l o ye es -in the s o li c i t a t i on 

area or t heir families y h o uld bo 

abl e to r e c e ive s e rvices from 

the agen c y wi t hin a re as o nabl e 

dis t an ce , or r e ce iv e ben efirb-s 

from v o lunta r y a ge nci e s . 

Examples of s er vi c es are ■ 

(a) r e search a nd e duca t ion 

in- the heal t h ami welfar e or 
e duca t i on fields ; 

(b ) family and child 
care services ; 

(c ) pro te ctiv e services for 
c hildr e n and adul t " J ; 

■(-cB- s e rvic e s for c hild ren 
and adul t s in fost e r c ar e ; 

( e ) s e rvices re la t ed to 

tho management and 
main te nance of th e hom e ; 

(f ) day care se rv i ce s 
for adult s ami c hildr e n ; 

( g ) t ransp o r t a t ion servic e s , 
■in-for ma t ion referral arrd 
co uns e lin g services ; 

■HrJ' "the prepara t i on arrd 

delivery of meals ; 
t-x-}- ad o p t i o n services ; 
( j ) e merg e n c y sh e l t er car e 

and re lief services ; 
(k) safety se rvices ; 



State employees 



or 



their 



c o m m unity 
serviccii ; 



o rganiza t ion 



(m ) recrea t ion services ; 
-frr> social adjus tme nt ami 

rehabilitation 
(o ) h e alth supp ort 

services ; or 
(p ) a comb mat ion of 
cics ignect to mc ct TTto 
of sp ec ial gr o up s s-trch as 
the e lde r ly or han di c a pped— 
H o weve r , tm in t criut t i o ria i: 
or ganiza t i on w hich provides 
h e alth ami w e lf are servi ce s 
o v e rs e as , whos e a ct ivi t i e s do 
not r e qui re a local pres e n c e arrd 
whi c h me et ot h e r el igibili t y 
c r i t e r ia . may bo a c cep t ed for 
pa rt i c ipa t i o n im the c ampaign . 

Eligibility for 
p articipation in the campaign 

sha ll be limited to 

non-profit 



non-part is ian, 
charitable 



organizat ions 



providing traditional health, 
welfare or educational services 
to state employees or their 
fam ilies within the statewid e 
area . Such 



sol icitat ion 



families . 



The services must 



consist of care, research or 
cdu c a t ion in the fields of human 
health, socj a l adjustment, o r 

roll n hil itat ion . Addition al 

services mny include relief 



mn y 

times 



of 



natural 



during 

disa ste rs or oth n r emergence cs 
a s wnll as ass i stance to the 
needy in the form of food, 
clothing and shelter. 

As previously set forth, an 
organization selected by the 
S.E.C.C. Advisory Committee as a 
participant in the Combined 
Campaign must meet the 



A cceptance 



Criteria . 



In 



addition 



to 



the 



specified 



criteria, the S.E.C.C. Advisory 

Committee possesses the 

authority to consider additional 
related factors. Such factors 



given 



consideration 



_by_ 



the 



Committee i n elude but are not 



limited 



to 



present 



need, 



services must directly benefit 



du plication of existing services 
provided to state employees by 
the State of North Carolina, 
progr a ms, goals and initiative s 
of S t ate government and the 
n ecessity to limit participation 
of organizations to a reasonable 
and manageable number. 

SECTION .0300 APPLICATION 
PROCESS AND SCHEDULE 

.0301 SCHEDULE 

Co m plete applications 
must be submitted to the State 
Campaign Committee by March 1 to 
be included in the fall 
campaign. Incomplete 

appl ications will not be 

considered by the Committee. 

.0302 RESPONSE 

All applicants will be 
notified of their acceptance or 
rejection with 30 days from 

receipt of the completed 

a p_p li_c at ion by t h e committee . 
Rejections may shn.l 1 be appealed 
to the campaign director within 
30 d a ys of receipt of the notice 
of rejection — btrt An appeal 
will not be allowed to delay the 
start of the campaign. 

.0303 FORM AND CONTENT OF 

APPLICATION 
All organizations seeking 
funding must submit an 
application to the state 
campaign. The application must 
include : 

(1) A letter from the board 

of directors indicating 
interest . 

(2) A complete description of 
services provided, and the 
service area of the 
organization . 



432 



NORTH CAROLINA REGISTER 



( 3 ) A The most recent 
financial statement for the 
previous year, including the 
most recent audit . 

(4) A board statement of 
assurance of 
non-discrimination . 

(5) A description of the 
origin, purpose and structure 
of the organization. 

(6) A list of the current 
members of the board, 
including addresses. 

(7) A letter certifying 
compliance with the 
eligibility standards listed 
in Rule .0202 of this Chapter 
including tax exempt status, 
licensing, and showing the 
percentage of funds used for 
administrative and 
fundraising purposes and the 
percent expended for services 
to the public . 

SECTION .0400 - GENERAL 
PROVISIONS 

.0403 PAYROLL DEDUCTION 

If an employee chooses 
to use the payroll deduction 
method of contributing, t+rcy 
he/she must agree to having the 
deduction continue for one year 
with equal amounts being taken 
from each check (monthly or 
biweekly depending on the 
payroll). All deductions will 
start with the January payroll 
and continue through December. 
If the employee discontinues 
employemnt , or actively chooses 
to discontinue payment, the 
state will not be responsible 
for the collection of the unpaid 
pledge. No deduction will be 
made for any period in which the 
employee's net pay, after all 
legal and previously authorized 
deductions, is insufficient to 
cover the allotment . No 
adjustments will be made in 
subsequent periods to make up 
for deductions missed. 

.0404 CAMPAIGN LITERATURE 
Each charitable organization 
accepted as a part fo the 
campaign, must provide adequate 
information about its services 
provided to the local campaign 
manager for use in the local 
campaign . 

.0407 EFFECTIVE DATE OF 
AMENDED RULES 

These amended rules shall 
become effective on Fefruarv 1 ■ 
1987 or when filed with the 



TITLE 10 



HUMAN RESOURCES 



Director 



of 



the 



Office 



of 



Administrative 



Hearing s 



whichever occurs last and shall 



Notice is hereby given in 
accordance with G.S. 150B-12 
that the Medical Care Commission 
intends to repeal regulations 
cited as 10 NCAC 3N .0100; 
.200; .0300; .0400; and .0500. 

The proposed effective date of 
this action is February 1, 1987. 

Statutory Authority: G.S. 131A. 

The public hearing will be 
conducted at 9:30 a.m. on 
December 12, 1986 at Room 201, 
Division of Facility Services, 
701 Barbour Drive, Raleigh, N.C. 
27603. 

Comment Procedures: Written 
comments should be submitted to 
Mr. I. 0. Wilkerson, Jr. , 
Secretary, Medical Care 
Commission, 701 Barbour Drive, 
Raleigh, N.C. 27603. These 
comments will be received from 
the date of publication until 
December 1 1 , 1986 . 

SUBCHAPTER 3N - GUIDELINES 

HEALTH CARE FACILITIES 

FINANCE ACT 

SECTION .0100 - DEFINITIONS 

.0101 PATIENT BED (REPEALED) 
.0102 EQUIPMENT (REPEALED) 
.0103 BUILT-IN EQUIPMENT 

(REPEALED) 
.0104 DESIGNER (REPEALED) 
.0105 DIVISION (REPEALED) 
.0106 LEASE, LESSEE 

(REPEALED) 

SECTION .0200 - APPLICATIONS 

.0201 ELIGIBLE APPLICANTS 

(REPEALED) 
.0202 ELIGIBLE PROJECTS AND 
ALLOV.ABLE COSTS 
(REPEALED) 
.0203 REIMBURSEMENT OF 
ALLOWABLE COSTS 
(REPEALED) 

SECTION .0300 PROJECT 
DEVELOPMENT 



apply to all 



)1 ications then 



pending or thereafter approved 



,0301 
,0302 

,0303 



0304 



0305 
0306 



0307 



CONFERENCE (REPEALED) 
SELECTION OF ARCHITECT 
OR ENGINEER (REPEALED) 
LONG-RANGE PLAN AND 

AREA-WIDE PLANNING 
(REPEALED) 
NARRATIVE PROGRAM 

(REPEALED) 
SCHEMATIC PLANS 

(REPEALED) 
PRELIMINARY FEASIBILITY 

STUDY (REPEALED) 
APPLICATION (REPEALED) 



NORTH CAROLINA REGISTER 



433 



.0308 COMMISSION APPROVAL 

(REPEALED) 
.0309 FINANCIAL FEASIBILITY 

STUDY (REPEALED) 
.0310 PRELIMINARY WORKING 

DRAWINGS (REPEALED) 
.0311 FINAL WORKING 

DRAWINGS (REPEALED) 
.0312 PREPARATION OF BOND 

DOCUMENTS (REPEALED) 
.0313 OPENING OF BIDS 

(REPEALED) 
.0314 SALE OF BONDS (REPEALED) 
.0315 AWARD OF CONTRACTS 

(REPEALED) 
.0316 EQUIPMENT LIST 

(REPEALED ) 
.0317 CONSTRUCTION PHASE 

ACTIVITIES (REPEALED) 
.0318 OCCUPANCY (REPEALED) 
.0319 AUDITS (REPEALED) 
.0320 TRANSFER OF TITLE 

(REPEALED) 
.0321 GENERAL STANDARDS OF 

DESIGN AND CONSTRUCTION 
(REPEALED) 

SECTION .0400 STANDARDS OF 
OPERATION AND MAINTENANCE 

.0401 LICENSURE (REPEALED) 

.0402 CONTROL (REPEALED) 

.0403 ORGANIZATION (REPEALED) 

.0404 MAINTENANCE (REPEALED) 

SECTION .0500 EQUIPMENT 
ACQUISITION PROJECTS 

.0501 ELIGIBLE APPLICANTS 

(REPEALED) 
.0502 ELIGIBLE PROJECTS AND 

ALLOWABLE COSTS 
(REPEALED) 
.0503 REIMBURSEMENT OF 

ALLOWABLE COSTS 
(REPEALED) 
.0504 CONFERENCE (REPEALED) 
.0505 SELECTION OF ARCHITECT 

OR ENGINEER (REPEALED) 
.0506 NARRATIVE PROGRAM 

(REPEALED) 
.0507 SCHEMATIC PLANS 

(REPEALED) 
.0508 APPLICATION (REPEALED) 
.0509 COMMISSION APPROVAL 

(REPEALED) 
.0510 FINANCIAL FEASIBILITY 

(REPEALED) 
.0511 PRELIMINARY WORKING 

DRAWINGS (REPEALED) 
.0512 FINAL WORKING DRAWINGS 

(REPEALED) 
.0513 PREPARATION OF NOTE 

DOCUMENTS (REPEALED) 
.0514 OPENING OF BIDS 

(REPEALED) 
.0515 SALE OF NOTES (REPEALED) 
.0516 AWARD OF CONTRACTS AND/ 

OR PURCHASE ORDERS 
(REPEALED) 
.0517 EQUIPMENT LIST 

(REPEALED) 
.0518 CONSTRUCTION PHASE 

ACTIVITIES (REPEALED) 



.0519 OCCUPANCY (REPEALED) 

.0520 AUDITS (REPEALED) 

.0521 TRANSFER OF TITLE 

(REPEALED) 

.0522 LICENSURE (REPEALED) 

.0523 ORGANZATION (REPEALED) 

.0524 MAINTENANCE (REPEALED) 

Notice is hereby given in 
accordance with G.S. 150B-12 
that the Division of Health 
Services intends to adopt, 
amend, repeal regulations cited 
as 10 NCAC 4B .0101 through 
.0106; .0108; .0109 and .0201 
through .0208; 10 NCAC 4C .0304; 



.0305 


■ 7B .0205; .0211; 


.0212; 


.0354 


8A .0312; 8B .0312 and 


.0313 


.0501 through 


.0505; 


.0607 


.0609; .0611; and 


.0613 


through .0615; 8D .0308; 


.0506; 


.0516; .0704; .0706; 8F 


0111 ; 


8G .0712; 8J .0908; 1 0A 


0316; 


.0318 


.0485; .0527; 


.1031; 


. 1033 


.1136; .1138; .1213 


; and 


.1214 


.1955; .1965; 


21 15; 


.2221 


.2307; .2308; .2417 


; 10B 


.0100 through .0400 and 


.0800 


through .1307; and IOC 


0509; 


.0514; .0703; .0705; 1 0D 


0801; 


.0802; .1102; .1209; 


1306; 


.1312 through .1314; 


1625; 


.1631 and .2603; 10F 


0002; 


.0029; .0030; .0032 through 


.0034 


and .0041 . 





The proposed 
this action 
and February 



effective date of 
is January 1, 1987 
1, 1987. 



Statutory 

20-139. 1 ( 

130A-5(3) 

130A-177 

130A-228 

130A-239 

130A-275 

130A-294( 

130A-315; 

130A-320; 

143B-10 

150B-1 1 

150B-17 

40 C.F.R 

697, s. 3 



Authority : 
b); 90A-29; 
; 130A-124; 
130A-205; 
130A-230; 
130A-248; 
130A 
a)(7); 

130A-317; 
130A-335(e); 
143B-142; 
150B-12; 
150B-23; P.L 
. 141; 1985 



P ^ 

130A-4(b) 

130A-127 

130A-220 

130A-236 

130A-250 

294(a)(3) 

130A-294(c) 

130A-318 

131E-56 

143B-193 

150B-16 

93-523 

S . L . , c 



The public hearing will be 
conducted at 1 =30 p.m. on 
November 14, 1986 at Highway 
Building, Auditorium (First 
Floor), 1 South Wilmington 
Street, Raleigh, North Carolina. 

Comment Procedures: Any person 
may request information or 
copies of the proposed rules by 
writing or calling John P. 
Barkley, Agency Legal 
Specialist, Division of Health 
Services, P.O. Box 2091, 
Raleigh, North Carolina 
27602-2091, (919) 733-3131. 
Written comments on these 
subjects may be sent to Mr. 



434 



NORTH CAROLINA REGISTER 



Barkley at the above address. 
Written and oral (for no more 
than ten minutes) comments on 
these subjects may be presented 
at the hearing. Notice should 
be given to Mr. Barkley at least 
three days prior to the hearing 
if you desire to speak. 

CHAPTER 4 - HEALTH: OFFICE OF 
THE DIRECTOR 

SUBCHAPTER 4B - PROCEDURAL RULES 

SECTION .0100 - PROCEDURES: 
HEALTH SERVICES COMMISSION 

.0101 PETITIONS 

(a) Any person wishing to 
request the adoption, amendment, 
or repeal of a rule of the 
Commission for Health Services 
t h e D ivision of Health 



or 



in 

e*e± 



to: 



Services shall make his request 
a petition addressed 
ce o-f Adu 
edures State Heal th 



l-'roc 

D irector , 
Serv 
Rale 
(b) 
the 
(1 



Division of Health 
aces, P. 0. Box 2091, 
igh. North Carolina 27602. 



The petition shall contain 
following information: 
) either a draft of the 
proposed rule or a summary 
of its contents; 

(2) the statutory authority 
for the agency to promul g a te 
adopt the rule; 

(3) the reasons for the 
proposal ; 

(4) the effect of the 
proposed rule change on 
existing rules or- or d e r s and 
statutes : 

(5) any data supporting the 
proposal ; 

(6) the effect of the 
proposed rule on existing 
practices in the area 
involved, including cost 
factors ; 

(7) the names and addresses, 
if known. of those most 
likely to be effected by the 
proposed rules; and 

(8) the name and address of 
the petitioner. 

(c) The Commission for Health 
Services or i t s desiyu e e the 
State Health Director shall 
determine, based on a study of 
the facts stated in the 
petition, whether the public 
interest will be served by 
granting the petition. The 
Commission for Health Services 
or irfc-s designe e the State Health 
Director shall consider all the 
contents of the submitted 
petition, plus any additional 
information it deems relevant. 

(d) Within 3-0 day* of 
submissi o n of "the p et i t ion the 
time period prescribed by G.S. 



1 50B-1 6 , the Commission for 
Health Services or its d e si g nee 
t h e State Health Director, each 

wi t hj n the j r desi gnated 

authori ties , shall render a 
decision to deny the petition or 
to initiate rule making 
proceedings. If the decision is 
to deny the petition, the 
Commission for Health Services 
or -it-s de s ignee the State Health 
Director shall notify the 
petitioner in writing, stating 
the reasons for the denial . If 
the decision is to approve the 
petition, the Commissi on -for 
Heal t h S ervices or- -irfc-s d esi g ne e 
Division of Health Services 
shall initiate a rule-making 
proceedings by issuing a rul e 
making n o tice , as provided in 
these rules . 

.0102 NOTICE (REPEALED) 

.0103 HEARING OFFICER 
(REPEALED) 



.0104 HEARINGS 

(a) Upon a dctcrminatio n_ 



to 



h old a rule-making proceeding, 
either in response to a petition 
or otherwise, the Division of 



Health 



Services 



shall 



give 



notice of a public hearing on 
the proposed rule in accordance 
G.S. 150B-12. 

(b) Any person desiring 
information in addition to that 
provided in a particular rule 
m aking notice may contact: 
Office of Legal Assistance, 
Division of Health Services, P. 



0. 



Box 2091 



Raleigh , 



North 



Carolina 27602. 

■Hr> ( c ) Any person desiring to 
present data, views, or 
arguments orally on the proposed 
rule must, at least three days 
before the hearing, file a 
request with: Office of 
Adminis tr ative Pr oc edui es Lega l 
Assistance , Division of Health 
Services, P. 0. Box 2091, 
Raleigh, North Carolina 27602. 
This requirement may be waived, 
or a failure to file a request 
may be excused. in the 
discretion of the pre s iding 
hearing officer. Any person 
permitted to make an oral 
presentation is encouraged to 
submit a written copy of the 
presentation to the hearing 
officer prior to the hearing, or 
to the hearing officer at the 
hearing . 

■Hr> ( d ) A requ e s t "bo make an 
oral presen t a t ion mtrs+ con t ain a 
br ief s ummary o-f th e r eq uesting 
p er son' s views with respec t *to 
■the subjec t matter , stmt a 
stat e men t o-f t h e l e ng th of time 
the person in t end s -to s peak . 



NORTH CAROLINA REGISTER 



435 



Presentations may not exceed 10 
minutes unless, upon request 
made either before or at the 
hearing, the hearing officer 
grants an extension of time for 
good cause . 

( c ) The offi c e trf 
adminis t ra t iv e p r oce dur e s s hall 
promptly acknowledge r ecc lpt of 
a request to make an oral 
pr es e ntation ami shall inform 
tne requesting p e rson o-f arty 
limi t a t i o ns dee me d necessary to 
■the end o-f a full and e ffec t iv e 
p ubli c h e aring on t he p roposed 
r ule . 

-(-d-)- (e ) Any person may file a 
written submission containing 
data, comments, or arguments 
after publication of a 
rule-making notice up to and 
including the day of the 
hearing, unless a longer period 
is stated in the prticular 
notice or an extension of time 
is granted for good cause . A 
submission must clearly state 
the rule or proposed rule to 
which the comments are addressed 
and must also include the name 
and address of the person 
submitting it. Written 
submissions must be sent to : 
Office of Admini st ra t iv e 
P r o cedu res Legal As sista nce, 
Division of Health Services, P. 
0. Box 2091, Raleigh, North 
Carolina 27602. Tito o ffi ce will 
p ro mp t ly a c knowledge receip t of 
all wri tte n submissi o ns . 

-fe4 ( f ) The presiding offic e r 
at the hearing officer shall 
have complete control over the 
proc eedings public hearing, 
including : 

(1) the responsibility of 
having a record made of the 
proceedings , 

(2) extension of any time 
allotments, 

(3) recognition of speakers, 

(4) prevention of repetitious 
presentations, and 

(5) general management of the 
hearing . 

The pr e s i din g hearing officer 
shall assure that cacli person at 
the hearing is given a fair 
opportunity to present views, 
data, and comments. 

.0105 STATEMENT OF REASONS FOR 
AND AGAINST RULE MAKING 
DECISION 
-ftr> Any interested person who 
desires from the Commission for 
Health Services or the state 
health director a concise 
written statement of the 
principal reasons for and 
against the decision by the 
Commission for Health Services 
or the State Health Director to 
adopt or reject a rule may. 



either prior to the decision or 
within 30 days thereafter, 
submit a written request to: 
Office of Ad m inis t rativ e 
Pr o c e du re s Legal Assistance, 
Division of Health Services, P. 
0. Box 2091, Raleigh, North 
Carolina 27602. 

■Hr> An "in te res te d per so n" 
shall be defined as arry person , 
trs d e fin e d in G-rSrr 150A 2(7), 
wh o s e righ t s , du t ies , or 
privileges migh t be a-f-fe cted by 
the adop t ion of the r ul e . 

( c ) The request must be made 
■in wri t ing , nrtrs-fc c o n t ain a 
s t a t emen t showing that the 
re q ues t in g p ers o n is an 
in te res te d pe rs o n, and nrtrst- 
iden t ify tne r ul e or pr o p o sed 
rul e inv o lved . 

( d ) Th e Commission for Heal t h 
Services s hall issue tne 
s t a t em e n t of- r e asons for ami 
agains t i t s decision wi t hin AS 
days aft e r receip t of tne 
reques t . 



.0106 



RECORD OF RULE MAKING 
PROCEEDINGS (REPEALED) 



.0108 DECLARATORY RULINGS 

(a) The State Health Director 
of the fiiv is ion of Health 
S e r vi ces shall i n accordance 
with G.S. 150B-17 issu e have the 
po w er to make a declaratory 
rulings concerning rules fou nd 
in 10 NCAC 4-13. where the 
in s u e -irs wh e ther a rule -is 
applicabl e or whe t her a rule he 
or* hirs des ignce has made irs 
valid . The C o mmissi o n fxrr 
H e al t h Services shall hav e th e 
p owe r to make a d ec la r a to ry 
rul ing where the is sue i:^ 
whether a rule made by the 
Comm issi o n tot H e al t h Services 
or irt-s d e si g n e e irs valid . 

(b) All requests for 
declaratory rulings shall be by 
written petition and shall be 
submitted to: Off i ce of 
Ad minis t ra t iv e P rocc d nres State 
Healt h Dir ector, Division of 
Health Services, P. 0. Box 2091, 
Raleigh, North Carolina 27602. 

(c) Every request for a 
declaratory ruling must include 
the following information: 

( 1 ) the name and address of 
the petitioner, 

(2) the statute or rule to 
which the petition relates, 

(3) a concise statement of 
the manner in which the 
petitioner is aggrieved by 
the rule or statute or its 
potential application to 
him, and 

(4) the consequences of a 
failure to issue a 
declaratory ruling. 

(d) Whenever the person or 



436 



NORTH CAROLINA REGISTER 



body -Hrjrt has -the power "bo make 
a declara t ory r uling Sta te 
Health Director believes for 
good cause that the issuance of 
a declaratory ruling is 
undesircablc , he may refuse to 
issue one . When good cause is 
deemed to exist . the per s on or 
body til at has the p o w e r to make 
a d e clara tory rul i ng State 
Heal th Director shall notify in 
writing the petitioner and the 
hearing officer of his decision, 
stating reasons for the denial 
of a declaratory ruling. The 
p e r s o n or body t-h-a-t has -tire 
power to make a de c lara to ry 
rul ing may re fuse to c o nsid trr 
the validi t y o-f a rule Stat e 
Health Director must consider 
the validity of a rule under the 
following circumstances: 

(1) unless the petitioner 
shows that the circumstances 
are so changed since 
adoption of the rule that 
such n ruling would be 
warranted; 

(2) unless the rule making 
record evidences a failure 
by the agency to consider 
specified relevant factors; 

(3) if there lias been a 
similar controlling factural 
determination in a contested 
case, or if the factual 
context being raised for a 
declaratory ruling was 
specifically considered upon 
adoption of the rule being 
questioned as evidenced by 
the rule making record; or 

(4) if circumstances stated 
in the request or otherwise 
known to the agency show 
that a contested case 
hearing would presently be 
appropriate . 

( e ) Wh e re a decla ratory 
ruling -irs d ee m ed appr o pr i a t e , 
•the pe rson or- b o d y that has -the 
po wer "bo make r a d ec laratory 
ruling s hall issue the rul ing 
wi t hin €r& days of the r eceip t of 
•rite p etiti o n . 

-(-f4 iej. A declaratory ruling 
procedure may consist of written 
submissions, oral hearings, or 
such other procedure as may bo 
deemed appropriate, in the 
discretion of the person or body 
t ha t has tbe power to make a 
d e c la r atory r uling State Health 
Director , in the particular 
case . 

( g ) ( f ) The person or body that 
has the pou;r t-o mtr^cc a 
decla r a t o r y rul in g State Health 
Director may issue notice to 
persons who might be affected by 
the ruling that written comments 
may be submitted or oral 
presentations received at a 
scheduled hearing. 



-(-h-> A r ec or d of" all 
d ec larat o ry rulin g proce e dings 
shaii be irra-rrrfc ained by the 
O ffi ce o-f Admin is I rat iv e 
P ro ced ur e s and s hall be 
avrri-l-r.Wre for pafa l i c ins pe c t ion 
dtn~i-rrg reg ula r b usin e ss h o urs . 
Th is. r ec o rd shall con tain : 
( 1 ) t-he or i g inal r e q ues t , 
( 2 ) -the rca- sons f o r refusing 

■bo ars-sate a ruling , 
( 3 ) all rrr-rtrten mem o randa 

and irrrfoTTTrert i o n submi t ted , 
-(-4-> any re cord of an o ral 

hea r in g ■ an d 
( 5 ) a -st at e ment o-f t he 
rulin g . 

.0109 CONTESTED CASE HEARINGS 
All coiv be s t ed cases ar is in g 
under -the rules -in Chapt e rs 4 — 1-5 
w he t h e r a dopte d by -the 
{ronrar ission -for Heal t h Service s 
or by ■the Se cre t ar y of -the 
De p artmen t of Hum a n Resources or 
his/he r d e lega t ed a ge nt , ( excep t 
"Hros-e corrte-s-tcd c as e s dealing 
w-rth lic e nsure of- skilled 
nu rs in g homes ) s hall be heard by 
o ne or more hearin g o fficers 
ap p oin te d by the S e c ret ary ox" 
the Departitient ox Human 
Resource s or by his/her 
d e l e gat e d agen tr Such c o n te s t ed 
case hear-irtg-s shall be h eard -in 
accordance with rules found an 
-H> N€-A6 +B-r Appeals concerning 
the interpretat ion and 



enforcement of the 


rules in 


10 


NCAC 4 


-13 shall 


be made 


in 


accordance with G.S 


. 150B. 


The 


final 


decision in contes 


ted 


cases arising under 


the rules 


in 


10 NCAC 


4-13 shall 


be made 


by 



the State Health Director. 

SECTION .0200 - RULE MAKING: 
DIRECTOR 

.0201 PETITIONS (REPEALED) 

.0202 NOTICE (REPEALED) 

.0203 HEARING OFFICER 
(REPEALED) 

.0204 HEARINGS (REPEALED) 

.0205 JUSTIFICATION OF RULE 
MAKING DECISION 
(REPEALED) 

.0206 RECORD OF RULE MAKING 
PROCEEDINGS (REPEALED) 

.0207 FEES (REPEALED) 

.0208 DECLARATORY RULINGS 
(REPEALED) 

SUBCHAPTER 4C - PAYMENT PROGRAMS 

SECTION .0300 - ELIGIBILITY' 
DETERMINATIONS 



NORTH CAROLINA REGISTER 



437 



.0304 APPEALS PROCEDURE 

CONCERNING ELIGIBILITY 
(REPEALED) 

.0305 APPEALS PROCEDURE 

Appeals concerning the 
interpretation and enforcement 
of the rules in this Section 
shall be made in accordance with 
G.S. 150B and 10 NCAC IB. 

CHAPTER 7 - HEALTH: EPIDEMIOLOGY 

SUBCHAPTER 7B - HIGHWAY SAFETY 

SECTION .0200 - BLOOD ALCOHOL 
TEST REGULATIONS 



.0205 



DENIAL OF PERMIT 
(REPEALED) 



.0211 REVOCATION OF PERMIT 

( a ) If the director receives 
unfavorable information 

concerning the character or 
ability of any blood analyst, he 
shall direct an investigation to 
be made. If the director 
becomes satisfied that the 
unfavorable information is 
accurate, and that the blood 
analyst would for this reason no 
longer be eligible to be granted 
an initial or renewal permit, he 
shall suspend or revoke the 
permit in accordance with G.S. 
130A-23. 

-f+jd The dir e c t or s hall send 
a n ot ic e o-f revoca t ion -to t+re 
blo o d analys t by regis te r e d 
mail . and t h e p er m it drr t h e 
po ssessi o n o-f -the b lo od a nalys t 
shall be r e voked at- midni g h t or 
tire titty -the n ot i ce o-f revo c a t i o n 
was mailed arrd shall be 
■imme dia te ly surr e nd e red u p on 
re c eip t of notic e of r cv oc at i o n . 

( c ) An y bl oo d analys t .T h o s e 
per mit has been revoked may 
app e al streh a cti o n ■ All 
rrrquest-s f o r app e al -s hall be by 
wr i t ten p et i t i o n and s hall be 
submit t e d txr-r Dir e c tor . 

Divisi o n of He al t h S e rvices, P-r 
6-r Box 2-09+7- Raleigh, N-rC-r 
27602 . Add: appeals shall be 
conduc te d -in accordan c e wd-bh 
G-rS-r +50Ar +0 N€AG 4fi- and wd+h 

.0212 APPEALS PROCEDURE 

Appeals concerning the 
interpretation and enforcement 
of the rules in this Section 
shall be made in accordance with 
G.S. 150B and 10 NCAC IB. 

SECTION .0300 - BREATH ALCOHOL 
TEST REGULATIONS 

.0354 REPORTING OF ALCOHOL 

CONCENTRATIONS BY BREATH 
ANALYSTS 



(a) When performing chemical 
analyses of breath under the 
authority of G.S. 20-139.1 and 
the provisions of these Rules, a 
report by a breath analyst of a 
breath-test reading of 0.10 
percent by weight of alcohol in 
a person's blood shall be deemed 
as reporting 0.10 alcohol 
concentration . 

(b) When performing chemical 
analyses of breath under the 
authority of G.S. 20-139.1 and 
the provisions of these Rules, 
chemical analysts shall report 
alcohol concentrations on the 
basis of grams of alcohol per 
210 liters of breath. All 
results shall be reported to 
hundredths of a percent. Any 
result between hundredths shall 
be reported to the next lower 
hundredth . 

CHAPTER 8 - HEALTH: PERSONAL 
HEALTH 

SUBCHAPTER 8A - CHRONIC DISEASE 

SECTION .0300 - CHRONIC RENAL 
DISEASE CONTROL PROGRAM 

.0312 APPEALS PROCEDURES 
Ap pe als shall be c o nduc t ed dTt 
accoi dance wddh G.S. 1 50A and 
w ith +0 NGA€ -rfi-r A pp eal s should 
he dire ct ed -to t he S t a te Heal t h 
Di r ec tor . Appeals concerning 

the interpretation and 

enforcement of the rules in this 
Sec t ion shall be made in 
accord a nce with G.S. 150B and 10 
NCAC IB. 

SUBCHAPTER 8B - MATERNAL AND 
CHILD HEALTH 

SECTION .0300 - LOCAL HEALTH 
DEPARTMENT PROGRAM AND FUNDING 

.0312 SCOPE OF SERVICES 
( a ) Lo c al providers may 
ut 11 izc MGH p rogra m f unds -to 
p r o vid e -the f o ll ow in g services 
arrd progr-anrs : 

( 1 ) 6 oni ir .unity ou t reach 
includin g educa t i o n, 

recrui t men t , arrd f o ll o w — erp 
o-f women, infan t s and 

( 3 ) C hild health assess m en t , 
f ollow — trp diagn o s t i c , arrd 
t rea t men t s e t vices; 
-(-4-)- Scho o l heal t h services 
in c l u din g t+re School Heal t h 
Tun d; 
-f-5d I d e n t if i c a t i o n arrd 

tr a c kin g of infan t s arrd 
c hildren at- risk for 
developmental delays and 
o ther handi c a pp in g 

c ondi t ions ; 
lu) i r enax ai arret 



438 



NORTH CAROLINA REGISTER 



services 
( ) Family p T aimin g 



*9-> 



Fund : 



Acc idc-rrt an-d -i njury 
pre ven t i o n s e rvices : 
-f+(H- Sm!dm Trrfarrt frc-rrtrr 

Syndro me grief c ouns e l in g 
servi c e s a nd publ i c 

infoi ina t-rcm ac t ivi t i e s ; 

(11) Lead p o isoning 
preven t ion and aba teme n t 

(12) Den t al servic e s for 



-H 



children i 
B- Nrt-in 



arrd social 
work services ; arrd 
(14) O t her a ct ivi t i e s t+ra-t 

p romote -Hre h e al t h of 
mo t hers and children t+rtrt 
are no t o t herwise p ro hibi t e d 
by f e d e ral arrd s t a te laws 
and reg ula t i o ns . 
(b ) Local p r o viders may not- 
ut ilize M6H p rogram funds for 
the f o llowin g ■ 

( 1 ) Purchas e of inpa t ien t 
care otW c r than t hat 
jred through t he MSH 
fund arrd Gchoul 



sponst 
D eliv e ry 



Healt h Fund; 
( 2 ) Cash paymen t s to direc t 

recipi e n ts o-f heal t h 

s er vices ; 
( 3 ) Purchas e or improvemen t 

of land ; 

or permanent improvement 
( o t her "th-an m in o r 
remodel in g ) of any buildin g 
or ci ther f acil i t y : 
4-54- Purchas e of majo r m edical 

e quipmen t ; and 
-*-&-)■ Abor t ion . 
■f-c4 Wi t hin rh-e service 
1 imi t a t ions of t it is Section 
commensurat e 
availabl e to 
services a-s 



sjoct ion and 

with fun da 

pay for t hose 

specified -irt rrrc 



approved contract bud ge t , t+re 
number arrd type of services 
o ffe re d will fcre n eg o t ia t ed 
annually wi t h each lo cal 
provider . approved by t h e 
program ■ and detailed -frr t he 
addendu m t-o the contrac t : 
(a) Local providers may 
utilize MCH chil d h e alth program 



fur 


ds to provide the following 


services and programs : 




( 1 ) Community outreach 
including education, 
recruitment. and follow-up 




of infants and children; 




(2) Immunization; 

(3) Child health assessment, 




follow-up diagnostic and 




treatment services; 
(4) School health services 




including the School Health 




Fund ; 
(5) Identification and 
tracking of infants and 



children 



at 



risk 



for 



de velopmental delays and 



other 



conditions ; 
(6) Accident 



handicapping 



and 



lnmrv 



p rev enti on s e rvices: 
(7) Sudden Infant Death 

Svn d rome g rie f counseli rig 



services 



inrl 



publ i c 



i nformation activities, 

(8) Lead poison ing 
prevention and abatement 
act ivit ies ; 

(9) Dental 



services for 



c hildren ; 
MO) Nutrition and social 

work services; and 
(11) Other activities that 



promote 



the 



health 



of 



children 



that 



are 



not 



otherwise 



prohibited 



by 



federal and state laws and 



rcgulat ions . 
( b ) _ Local providers 



ut il ize 



MCH 



may 



maternal health 



program funds to provide the 
following services and programs: 



( 1 ) Community outreach 



includ i ng 



education , 



recruitment, and follow-up 

of women: 
(2) Prenatal and postpartum 

services ; 
(3) 1 1CH D elivery Fund; 

(4) Family planning services; 

(5) Sudden Infant Death 
Syndrome grief counseling 

a 'i d public 



services 



information activities; 
(6) Nutrition and social 



work 



services ; 



and 



(7) Other activities that 



promote 



the 



health 



of 



mothers 
otherwise 



that 



not 



prohibited 



by 



federal and state laws and 
requlat ions . 
(c) Local providers may not 



ut il ize 



MCH 



maternal 



health 



progra m funds and child health 
program funds for the following: 
(1 ) Purchase of inpatient 

care other than that 

aut horized under (a)(4) and 
(b)(3) of this Rule. 



(2) Cash payments to direct 

recipients of health 

services ; 

(3) Purchase or improvement 
of land: 

( 4 ) Purchase, construction. 



o r 
(oth 



perma nent improve ment 

^r than minor 



remodeling) of any building 
o r other facility: 

(5) Purch a se of major medical 
eguipment; and 

( 6 ) Abort ion . 



(d) Kithin the service 
limit at ions of this Section and 



conmen 


surate 


w 


ith 


funds 


availa 


ble 


to 


pay 


for those 


servic 


es 


as 


speci 


fied 


in the 


approv 


cd 


cont 


ract 


budg 


ets , the 


number 


and 


type 


of 


services 



NORTH CAROLINA REGISTER 



439 



offered 


will be negotiated 


annuallv 


with each local 


provider, 


approved bv the 


program , 


and detailed in the 



addendum to the contract . 

.0313 ALLOCATION OF FUNDS: 
CONTRACT 

( a ) Th er e shall ire all o ca t ed a 
A minimum of twenty thousand 
dollars ($20,000) per year of 
maternal health program f u nd s 
a n d twenty thousand dol la rs 
($20,000) per year of child 
health program funds s ha ll be 
allocated to each county of the 
state . 

(c) Any new state or federal 
funds to be distributed 
statewide to local providers 
shall be allocated based upon 
the following: 

(1) A minimum base 
allocation for each county - 
the sum total of which shall 
not be more than 50 percent 
or less than 25 percent of 
the total amount to be 
allocated . 

( 2 ) For maternal hea lth 

pro g ram f un d a l locat ions , 

each county's number of low 
income pregnant women, or 
ctri ldren and for child 



health program 


fund 


allocations, each 


county ' s 


number of low 


income 



children, both as indicated 
by the most recent 
information available from 
the North Carolina 
Department of 

Administ r at ion ; 

(3) Each county's five year 
infant mortality rate as 
compared to the state ' s 
five year infant mortality 
rate; 

(4 ) For maternal health 
program fund allocations, 
each county's percentage of 
total state need for 
maternal health services, err 
c hild h e al t h scrv i ce s and 
for child he a lth progra m 



fund allocations , ea ch 

county's percenta g e of tot al 
state need for child healt h 
services, both compared to 
their percentage of total 
MCH funding for local 
providers ; 

(5) Service delivery gaps in 
given localities; and 

(6) Actual utilization of 
funds in previous fiscal 
years, special population 
groups, and other management 
considerations that relate 
to a local provider's 
ability to effectively and 
efficiently use additional 
funds . 



SECTION .0500 - MIDWIFERY 
PERMITS 

.0501 PERMIT APPLICATION 
(REPEALED) 

.0502 QUALIFICATIONS 
(REPEALED) 

.0503 PERMIT ISSUANCE 
(REPEALED) 

.0504 EXPIRATION AND 

REVOCATION OF PERMITS 
(REPEALED) 

.0505 APPEALS (REPEALED) 

SECTION .0600 - PEDIATRIC 
PRIMARY CARE PROGRAM 

.0607 GENERAL 

(b) The Pediatric Primary Care 
Program is administered by the 
Maternal and Child Health 
Branch, Maternal and Child Care 
Section, Division of Health 
Services, Department of Human 
Resources, P. 0. Box 2091, 
Raleigh, North Carolina 27602, 
(9 Hr* 733 779 ^-r (919) 

733-3816. 



.0609 PROVIDER ELIGIBILITY 
(b) Pediatric primary care 
funds may be awarded to any 
public or private nonprofit 
agency -in the- event if the MCH 
B ranch determines that a local 
health department is unwilling 
or unable to provide pediatric 
primary care services. All 
e l i g ibl e providers which 
contract for the receipt of 
pediatric primary care funds are 
required to provide services in 
accordance with the plan 
submitted under Rule -T06-9-5 Rule 
.0611 of this Section and 



approved by the MCH Branch. 

.0611 APPLICATION FOR FUNDS: 
PROGRAM PLAN: RENEWAL 
(b) Grant proposals for 
pediatric primary care project 
funds should be sent to the MCH 
Branch, N. C. Division of Health 
Services, P. 0. Box 2091, 
Raleigh, NC 27602. The grant 
proposal shall include the 
following : 

(3) a description of the 

medical services to be 
provided by the Primary Ca re 
Pr ogr a m of t+rc local 
provider including weekly 
clinic hours when pediatric 
primary care services will 
be made available. The plan 
shall specify, at a minimum, 
that pediatric primary care 
w ill be available at least 
four hours per day during 
regular workdays, and that 



440 



NORTH CAROLINA REGISTER 



all patients within the 
target population who 
present themselves during 
established clinic hours 
with symptoms or complaints 
requiring medical care will 
have a medical history 
taken, and appropriate 
examination, a written 
diagnosis of identified 
problem(s), treatment for a 
of medical 
and referral as 



(5 



variety 
conditions 
indicated . 

des cription 



(e) 



a greement fxrr 
of the backup 
services available for 
patients in need of care 
when the pediatric primary 
care clinic is not in 
operat ion . 

Contracts for pediatric 
nary care funds shall be 
ject to annual renewal based 
1 past performance and the 
:inued need for pediatric 
nary care services as 
Lcated by the Health Services 
srmation System reports and 
j visi t s pro g ram reviews 
formed by the MCH Branch to 
;ss compliance with the 
lirements of this Section. 
roved project proposal/plans 
: be reviewed annu a lly a n d 
\ted as needed by the loc a 1 
/idcr staff. Plans must be 



Stat 



avai l able upon request to 
e staff during annual 



program reviews . 

.0613 MEDICAL RECORDS 

A local provider which receives 
pediatric primary care funds 
shall establish and implement 
written policies and procedures 
for medical record usage that 
address at least the following 
known areas : 

( 1 ) D o cuwcntat ion o-f 

Documenting all patient care 
provided (for example, POHR), 

(2) Method for transferring 
retrieving pertinent patient 
information . 

(3) Assuring confidentiality 
of patient information. 

( 4 ) Ob t ain Obtaining an 
informed consent and release 
of information. 

( 5 ) R ete n t i o n Retaining and 
r et rieval o-f retrieving 
patient records according to 
the county records manual . 

.0614 CLIENT AND THIRD PARTY 
FEES 
(a) A local provider may 
impose charges on clients for 
pediatric primary care services . 
If patient fees are charged. 
such fees : 

(1) Will be applied according 



to a public schedule of 
charges . 

(2) Will not be imposed on 
low-income, individuals or 
their families. 

(3) Will be adjusted to 
reflect the income, 
resources, and family size 
of the individual receiving 
the services . 

(b) If -the- client fees are 
charged, providers must make 
reasonable efforts to collect 
from the third party payors. 

(c) Client and third party 
fees collected by the local 
provider for the provision of 
pediatric primary care services 
must be used upon approval of 
the program to enhance , expand 
or maintain t h e se child health 
services. No person shall be 
denied services because of the 
inability to pay. 

.0615 MONITORING AND 
EVALUATION 
A local hea l th depar t ment 
h provider who has been 
ted pediatric primary care 
s shall participate in the 
th Services Information 
em . 



(a) 

whic 
gran 
fund 
Heal 
Syst 
(b) 
cond 
bTcrr 



The MCH Branch shall 
uct si te visi t s a+ l e as t 
nially aBDl]al p rogram 



ews to assess compliance 
the requirements w i t h of 
section and to provide 



revi 
with 
this 
technical assistance 



SUBCHAPTER 8D - CRIPPLED 

CHILDREN: DEVELOPMENTAL 

DISABILITIES BRANCH 

SECTION .0300 - ELIGIBILITY 

.0308 APPEALS PROCEDURE 

CONCERNING ELIGIBILITY 
4W- Appeals concerning 
eli g ibility that a-re mrtr 
r e so lv ed by *the dire cto r o-f 




e j h±irdr-tnr I s 
Services sh 
accordance 

wtHi +e m-xe +b-t 

fcre directed t~o "the 
division o-f h e al t h 
Appeals concerning 



Heal th 
■in 

i r it A _ . .1 

I jU/i 3TTO 

should 
director . 
services . 
the 



interpretation and enforcement 
of the rules in this Section 
shall be made in accordance with 
G.S. 150B and 10 NCAC IB. 

SECTION .0500 - AUTHORIZATION 
AND BILLING PROCEDURES 



.0506 APPEALS PROCEDURE 
CONCERNING 
AUTHORIZATIONS 
(REPEALED) 

.0516 APPEALS PROCEDURE 
Appeals concerning the 



NORTH CAROLINA REGISTER 



441 



interpretation and enforcement 
of the rules in this Section 
shall be made in accordance with 
G.S. 150B and 10 NCAC IB. 

SECTION .0700 - ROSTERS 

.0704 APPEALS PROCEDURE FOR 
ROSTER APPLICANTS 
(REPEALED) 

.0706 APPEALS PROCEDURE 

Appeals concerning the 
interpretation and enforcement 
of the rules in this Section 
shall be made in accordance with 
G.S. 150B and 10 NCAC IB. 

SUBCHAPTER 8F - SICKLE CELL 

SYNDROME: GENETIC COUNSELING: 

DEVELOPMENTAL DISABILITIES 

BRANCH 

SECTION .0100 - SICKLE CELL 
SYNDROME PROGRAM 

.0111 MEDICAL SERVICES 
PROVIDED 

( a ) The Nor t h Ca r olina sickle 
ce ll syndrome program s hall 
provide servic e s o nly w hen -they 
are nor availabl e through o ther 
sources or ag e nci e s . Prior to 
reques t ing servic e s , -art should 
be det er i.iin e d thai -the pati e n t 
is- rroi eligible ror s e rvic e s 
t hroug h r]-re division erf s er vi ce s 
for the blind; M e di c aid ami 
Medicar e programs; school h e al t h 
program; voca t i o nal 
reha b il i t a t ion ; workmen' s 
co r .ipcnsa t ion or c ivilian health 
arrd medical p rog rams o-f -the 
uniformed services ( CIIAMPUS) . 

(b) if art ind ividual m e e t s the 
e ligibili t y rcqu ii e men t s , he 
shall be pr o vided the f o ll o win g 
medical s er v ic e s : 

( 1 ) ror indiv idunls bel o w t h e 
age of 2 1 , aii o ut p a t i ent 
ami ait in p a t ient care shall 
be paid for by the Crippl e d 
Children 1 s Program , 

including aii hospital and 
p hysician fees . ror 
individual 2+ years o-f age 
a n d old e r , all o u t pa t i e n t 
arrd aii in p a t ien t care shall 
be p aid for by -the Si c kl e 
Cell Syndr ome Program . 
r2i Ou t patient services 
includ e : 
iAi routin e visits re the 

physician ; 
■fBi prescrip t ion drugs such 

as an t ibiotics ; 
(C ) ge n e ral anal ge sics ; 
( D ) applia n ces ; 
(E ) pr e v e n t iv e and 1 imi te d 

maintenance d e nt istiy -for 

adul t patient o nly ; 
rFi obsio-rricai ore 

( ex c luding d e liv ery oi 

baby ) ; and 



( G ) e ye care (when t he 

division o-f servic e s for 
the blind will nor pr o vid e 
c o v e ra g e ) . 
The Sickle Cell Syndrome 
Program provides reimbursement 



for 



services 



and 



supplies 



related to si c kle cell disea s e 



which 



financially 



provided 



to 



and 



medically 



eligible individuals 21 years of 

age and o lder. Financially 

eligible children under 21 with 
sickle cell disease who are not 
served by physicians rostered 
with Children's Special Healt h 
Services are also covered. The 
following services are covered: 
(1) inpatient hospitalization 

which is limited to five days 

per admission; and 

(a) hospital outpatient 
services , 

(b) e m ergency room 



services , 
( c ) physician' s 


services , 


(d) 
ad 


drugs and 
ministrat ion 


of drugs, 


(e) 


physical, occupational 


an 


d speech therapies, 


(f ) 


appliances and 


su 
(g) 


pplies , 
dental care 


for 



children , 
(h) emergency dental care 
for adults. limited 



to 



services 



necessary 



to 



control bleeding, relieve 



pain , 



eliminate 



acute 



infect ion , 



and 



treat 



traunatic injuries to the 



te eth, and 
( i ) eve care , 



only when 



d ocumentation is provided 
that coverage through the 



Division of Services 
Blind is available. 



for the 



SUBCHAPTER 8G 



PERINATAL CARE 



SECTION .0700 - HIGH RISK 

MATERNITY CLINIC FUNDS AND HIGH 

RISK MATERNITY CLINIC 

REIMBURSEMENT FUNDS 

.0712 PROVIDER ELIGIBILITY 

(a) A county or district 
health department or other 
public or private nonprofit 
health care agency may be a 
local provider and receive funds 
pursuant to these Rules. 

(b) Nothwithstanding 10 NCAC 
8G .0504, a for-profit provider 
may be considered a local 
provider for the purposes of 
this Rule if the division 
determines through a process of 
request for application that a 
nonprofit health care provider 
is not available within the 
perinatal region. Funding for 
training and research may not be 
granted to for-profit agencies. 



442 



NORTH CAROLINA REGISTER 



SUBCHAPTER 8J - THE LENOX BAKER 
CHILDREN'S HOSPITAL 



SECTION 



0900 - MEDICAL STAFF 
BYLAWS 



.0908 APPEALS 

(d) Appeals of a final 
determination may shall be made 
■bo ■Htc dir e ctor , divisi o n of 
h e al t h serv i ce s, in accordance 
with +S N6A€ +B G.S. 150B and 10 
NCAC IB. 

CHAPTER 10 - HEALTH SERVICES: 
ENVIRONMENTAL HEALTH 

SUBCHAPTER 1 0A - SANITATION 

SECTION .0300 - SANITATION OF 
LODGING PLACES 



,0316 



APPEALS PROCEDURE 
(REPEALED) 



.0318 APPEALS PROCEDURE 
Appeals concerning the 
interpretation and enforcement 
of the rules in this Section 
shall be made in accordance with 
G.S. 150B and 10 NCAC IB. 

SECTION .0400 - SANITATION OF 

RESTAURANTS AND OTHER 

FOODHANDLING ESTABLISHMENTS 

.0485 APPEALS PROCEDURE 
Appeals s hall be conduc te d -in 
accoi ' dancc wirrh G.S. 1 50A and 
wi+h +v NCAe +B-r Ap pe als sh o ul d 
b-e- di recte d to -the director of 
t+rc divi s i o n of heal t h s e rvi ce s . 

Appeals concernin g the 

interpretation and enforcement 
of the rules in this Section 
s hall be made in accordance with 
G.S. 150B and 10 NCAC IB. 



SECTION 



.0500 - SANITATION OF 
MEAT MARKETS 



.0527 APPEALS PROCEDURE 

Appeals shall be conducted -in 
accordance vrrfh G.S. 1 50A and 
wi t h +& NCAe +B-r Appeals shall 
be dir e c t ed ■bo th e Di re c to r of 
t h e Division of H e al t h Servi c es . 

Appeals concerning the 

interpretation and enforcement 
of the gules in this Section 
shall be made in accordance with 
G.S. 150B and 10 NCAC IB. 

SECTION .1000 - SANITATION OF 
SUMMER CAMPS 



.1031 



APPEALS PROCEDURE 
(REPEALED) 



interpretation and enforcement 
of the rules in this Section 
shall be made in accordance with 
G.S. 150B and 10 NCAC IB. 

SECTION .1100 - SANITATION OF 

FOOD AND BEVERAGE VENDING 

MACHINES 

.1136 APPEALS PROCEDURE 
(REPEALED) 

.1138 APPEALS PROCEDURE 
Appeals concerning the 
interpretation and enforcement 
of the rules in this Section 
shall be made in accordance with 
G.S. 150B and 10 NCAC IB. 



SECTION 



1200 - GRADE 
SANITATION 



"A" MILK 



.1213 APPEALS (REPEALED) 

.1214 APPEALS PROCEDURE 

Appeals concerning the 
interpretation and enforcement 
of the rules in this Section 
shall be made in accordance with 
G.S. 150B. 



SECTION 



190 - SEWAGE 
SYSTEMS 



DISPOSAL 



.1955 DESIGN CRITERIA FOR 
CONVENTIONAL SYSTEMS 

(e) Th e pi pe trsed be t we e n "the 
s e p t i c "bank and -the 
nitr if i c at ion fi e ld s nail be a 
m ini m u m o-f four inch insid e 
d-iran e t e r schedule 40 P VC or 
equivalen t wifn a minimum fall 
of not less than one e lghth inert 
per foo t . A-fi join t s s- hall be 
of wa tc r t igh t construc t ion . The 
pipe or tubing used between the 



sept ic 



tank 



and 



the 



nitrification line shall be 



mi nimum of four-inch nom inal 
:iz c Schedule 40 polyvinyl 



chloride 



( PVC ) 



ac rvlonitrile-butadiene-styrene 



(ABS) 



equivalent with 



minimum fall of one-eighth inch 
per foot . Where an effluent 



distribution device 



used 



between the septic tank and 
nitrification line, four-inch or 

greater nonperf orated 

polyethylene ( PE ) corrugated 
t ubing may be substituted for 
PVC or ABS pipe provided it is 



installed 



between 



the 



distribution device and the 
nitrification line in accordance 



with 



standard 



recommended 



p ractices. such as ASTM D2321. 
All joints from the septic tank 
to the nitrification line shall 
be watertight . 



.1033 APPEALS PROCEDURE 
Appeals concerning the 



.1965 APPEALS PROCEDURE 
Ap pe als concerning t+re 



NORTH CAROLINA REGISTER 



443 



interpre t ati o n and enf o r ce m e n t 
of the rules in th-±s Sec t i o n 
s hall be irratle by writ te n 
pe ti t i o n and shaii be snbrr±-t-tod 
-fc-o the Eir cct o r , D ivisi o n o-f 
He al th Services, P-r 0t Bore 2-09-Hr 
R-rleTTlrr NcTrth Ca ro l ina 

2-?-frfl2 " 20 9 1 . Aid: appeal sbai-i 
be con chrc-tcd -in accorc itrrrrre vrrth 
e^rS-r +5€A— +& NGAS +D ami vrrth 



the 



interpretation 



and 



+0 nbas 


4fr^- 
int 


Anne 


als 


concerning 


the 


erpret 


nti 


on 


and 


enforcement 


of the 


ru 


les in 


this 


Sec t ion 


shall 


be 


made 


in 


accordance w 


ith G. 


S. 


150B and 10 



NCAC IB. 

SECTION .2100 - RULES GOVERNING 

THE SANITATION AND SAFETY OF 

MIGRANT HOUSING 

.2115 PERMITS 

(f) A person whose permit is 
denied, suspended, or revoked 
may appeal that decision in 
accordance with G . C . -HK)A — 24 
G.S. 150B and +0 N€A€ +fi -rQttQ-r 
10 NCAC IB. 

SECTION .2200 - SANITATION OF 
BED AND BREAKFAST HOMES 

.2221 APPEALS PROCEDURE 
App e al s s hall be c ond trct-cd -in 
acc o r d an ce vrith G .S . +50A and 
vriril-c +& K€AG +B-r Appeals s ha ll 
be dirro ctcd -to the d-xr-c-ctor of 
th-e d- ivi sron-r Appeals 

concerning the int erpret a tio n 

a nd enfor c ement of th e r ule? i n 

this Section sh all li e n - 

a ccord a nce with G.S. 
NCAC 1 B". 



\dc i n 
"150B and 10 



SECTION .2300 - DELEGATION OF 

AUTHORITY TO ENFORCE COMMISSION 

FOR HEALTH SERVICES' SANITATION 

RULES 

.2307 APPEALS (REPEALED) 

.2308 APPEALS FR0CEDURE 

Appeals concerning the 
interpretation and enforcement 
of the rules in this Section 
shall be made in accordance with 
G.S. 150B and 10 NCAC IB. 

SECTION .2400 - SANITATION OF 
PUBLIC: AND RELIGIOUS SCHOOLS 

.2417 APPEALS PROCEDURE 

Ap peals con c er n ing the 
■xir*. - crpr ct a t lun and en fore ement 
o-f the rul e s -in -this S-ect i on 
s hall be irraxrc by m-art-ben 
pe t i t ion and s hall be submitt e d 
■to tbe S-tn-be He al th Di rector, 
Div is i on of He al th Services , P-r 
6- Box 2-0-9+r Raie i '-j h , Ne 
2^76-02— 20^9+r ftii ap pe al s sbabi 
be co n d u ct ed rim aeeorcl airce rrirth 
G-rS^ 4-50A-7- +0 NCAC -H3t and rrirbh 
+& N€?V9 4B-r Appeals concerning 



e nforcement of the rules in this 
Se ction shall be m ade in 
a ccord ance with G.S. 150B and 10 
NCAC IB. 

SUBCHAPTER 10B - SHELLFISH 
SANITATION 

SECTION .0100 - SANITATION OF 
SHELLFISH: GENERAL 

.0101 DEFINITIONS (REPEALED) 

.0102 CERTIFICATE OF 

COMPLIANCE (REPEALED) 

.0103 DAILY RECORD (REPEALED) 

.0104 SHELLFISH RECEIVING 
(REPEALED) 

.0105 SPECIAL PERMITS 
(REPEALED) 

.0106 PROHIBITED SHELLFISH 
HANDLING (REPEALED) 

.0107 HARVEST BOATS (REPEALED) 

.0108 SHELLFISH CLEANSING 
(REPEALED) 

.0109 SHELLFISH STORAGE 
(REPEALED) 

.0110 BACTERIOLOGICAL STANDARDS 

AND ENFORCEMENT 
PROCEDURES (REPEALED) 

.0111 SEVERABILITY (REPEALED) 

.0112 REFERENCE RULES 
(REPEALED) 

SECTION .0200 - OPERATION OF 
SHELLFISH SHUCKING AND PACKING 
PLANTS AND SHELL STOCK PLANTS 

.0201 INSPECTION AND APPROVAL 
(REPEALED) 

.0202 PERMIT (REPEALED) 

.0203 APPLICATION (REPEALED) 

.0204 PLANT LOCATION 
(REPEALED) 

.0205 SEPARATION OF OPERATIONS 
(REPEALED) 

.0206 DELIVERY WINDOW 
(REPEALED) 

.0207 LOCKERS (REPEALED) 

.0208 LIGHTING (REPEALED) 

.0209 FLOORS (REPEALED) 

.0210 WALLS (REPEALED) 

.0211 SHUCKING BENCHES 



444 



NORTH CAROLINA REGISTER 



(REPEALED) 

.0212 FLY CONTROL (REPEALED) 

.0213 REFRIGERATION (REPEALED) 

.0214 VENTILATION (REPEALED) 

.0215 TOILET FACILITIES 
(REPEALED) 

.0216 RODENT CONTROL 
(REPEALED) 

.0217 PLUMBING (REPEALED) 

.0218 WATER SUPPLY (REPEALED) 

.0219 HOT WATER SYSTEM 
(REPEALED) 

.0220 HAND WASHING (REPEALED) 

.0221 EQUIPMENT CONSTRUCTION 
(REPEALED) 

.0222 SANITIZING EQUIPMENT 
(REPEALED) 

.0223 CONTAINERS (REPEALED) 

.0224 NON-FOOD CONTACT SURFACES 
(REPEALED) 

.0225 GENERAL REQUIREMENTS FOR 
OPERATION (REPEALED) 

.0226 PERSONAL HYGIENE 
(REPEALED) 

.0227 EQUIPMENT SANITATION 
(REPEALED) 

.0228 STORAGE (REPEALED) 

.0229 SHELLFISH SHUCKING 
(REPEALED) 

.0230 ICE (REPEALED) 

.0231 SHELLFISH COOLING 
(REPEALED) 

.0232 WASTE DISPOSAL 
(REPEALED) 

.0233 SUPERVISION (REPEALED) 

.0234 TRANSPORTATION 
(REPEALED) 

.0235 EQUIPMENT USAGE 
(REPEALED) 

.0236 SHIPPING (REPEALED) 

.0237 ADULTERATED OR MISBRANDED 
SHELLFISH (REPEALED) 

.0238 APPEALS PROCEDURE 
(REPEALED) 

SECTION .0300 - OPERATION OF 
SHELL STOCK PLANTS 



.0301 CONSTRUCTION (REPEALED) 

.0302 "BUY" EOATS AND TRUCKS 
(REPEALED) 

.0303 GENERAL REQUIREMENTS FOR 
OPERATION (REPEALED) 

.0304 PERSONAL HYGIENE 
(REPEALED) 

.0305 EQUIPMENT USAGE 
(REPEALED) 

.0306 WASTE DISPOSAL 
(REPEALED) 

.0307 SALE OF LIVE SHELLFISH 
(REPEALED) 

.0308 SHIPPING (REPEALED) 

.0309 RECORD KEEPING 
(REPEALED) 

.0310 TAGGING (REPEALED) 

.031 1 BULK SHIPMENTS 
(REPEALED) 

.0312 BOAT OPERATORS RECORDS 
(REPEALED) 

.0313 STORAGE OF SHELL STOCK 
(REPEALED) 

.0314 REPACKING OF SHELLFISH 
(REPEALED) 

.0315 RESHIPPERS (REPEALED) 

SECTION .0400 - HEAT SHOCK 

METHOD OF PREPARATION OF OYSTERS 

FOR SHUCKING 

.0401 FACILITIES (REPEALED) 

.0402 LIGHTING (REPEALED) 

.0403 VENTILATION (REPEALED) 

.0404 TANK CONSTRUCTION 
(REPEALED) 

.0405 BOOSTER HEATERS 
(REPEALED) 

.0406 SHELLSTOCK WASHING 
(REPEALED) 

.0407 WATER TEMPERATURE 
(REPEALED) 

.0408 TIME REQUIREMENTS 
(REPEALED) 

.0409 WATER REOUIREMENTS 
? REPEALED) 

.0410 COOLING (REPEALED) 

.0411 CLEANING (REPEALED) 



NORTH CAROLINA REGISTER 



445 



.0412 SANITIZING (REPEALED) 

.0413 RECORDS (REPEALED) 

SECTION .0800 - SANITATION OF 
SHELLFISH - GENERAL 

.0801 DEFINITIONS 

The following definitions shall 
apply throughout this 
Subchapter : 

(1) "Adulterated" means the 
following : 

(a) Any shellfish that have 
been harvested from 
prohibited areas; 

(b) Any shellfish that have 
been shucked, packed, or 
otherwise processed in a 
plant which has not been 
permitted by the division in 
accordance with these Rules; 

(c) Any shellfish which 
exceed the bacteriological 
standards in Rule .0930 of 
this Subchapter; 

(d) Any shellfish which are 
putrid or unfit for human 
consumption; 

(e) Any shellfish which have 
been exposed to any 
unsanitary conditions; or 

(f) Any shellfish which 
contain any added substance, 
unless the substance is 
approved by the division or 
the United States Food and 
Drug Administration. 

(2) "Approved area" means an 
area determined suitable for 
the harvest of shellfish for 
direct market purposes. 

(3) "Bulk shipment" means a 
shipment of loose shellstock. 

(4) "Buy boat or buy truck" 
means any approved boat or 
truck that is used by a 
person permitted under these 
Rules to transport shellstock 
from one or more harvesters 
to a facility permitted under 
these Rules. 

(5) "Depuration" means 
mechanical purification or 
the removal of adulteration 
from live shellstock by any 
artificially controlled 
means . 

(6) "Depuration facility" 
means the physical structure 
wherein depuration is 
accomplished, including all 
the appurtenances necessary 
to the effective operation 
thereof. 

(7) "Division" means the 
Division of Health Services 
or its authorized agents. 

(8) "Heat shock process" 
means the practice of heating 
shellstock to facilitate 
removal of the shellfish meat 
from the shell . 

(9) "Misbrandcd" means the 



following : 

(a) Any shellfish which are 
not labeled with a valid 
identification number 
awarded by regulatory 
authority of the state or 
territory of origin of the 
shellfish; or 

(b) Any shellfish which are 
not labeled as required by 
these Rules. 

(10) "Operating season" means 
the season of the year during 
which a shellfish product is 
processed . 

(11) "Person" means an 
individual, corporation, 
company, association, 
partnership, unit of 
government or other legal 
entity . 

(12) "Prohibited area" means 
an area unsuitable for the 
harvesting of shellfish for 
direct market purposes . 

(13) "Relaying or 
transplanting" means the act 
of removing shellfish from 
one growing area or shellfish 
grounds to another area or 
ground for any purpose. 

(14) "Repacking plant" means a 
shipper, other than the 
original shucker-packer, who 
repacks shucked shellfish 
into containers for delivery 
to the consumer . 

(15) "Reshipper" means a 
shipper who ships shucked 
shellfish in original 
containers, or shellstock, 
from permitted shellstock 
dealers to other dealers or 
to consumers . 

(16) "Sanitary survey" means 
the evaluation of factors 
having a bearing on the 
sanitary quality of a 
shellfish growing area 
including sources of 
pollution, the effects of 
wind, tides and currents in 
the distribution and dilution 
of polluting materials, and 
the bacteriological quality 
of water . 

(17) "Sanitize" means the 
approved bactericidal 
treatment by a process which 
provides sufficient 
accumulative heat or 
concentration of chemicals 
for sufficient time to reduce 
the bacterial count, 
including pathogens, to a 
safe level on utensils and 
equipment . 

(18) "SELL BY date" means a 
date conspicuously placed on 
a container or tag by which a 
consumer is informed of the 
latest date the product will 
remain suitable for sale. 

(19) "Shellfish" means 



446 



NORTH CAROLINA REGISTER 



oysters, mussels, and all 
varieties of clams. 

(20) "Shellstock" means any 
shellfish which remain in 
their shells . 

(21) "Shellstock conveyance" 
means all trucks, trailers, 
or other conveyances used to 
transport shellstock. 

(22) "Shellstock dealer" means 
a person who buys, sells, 
stores, or transports or 
causes to be transported 
shellstock which was not 
obtained from a person 
permitted under these Rules. 

(23) "Shellstock plant" means 
any establishment where 
shellstock are washed, 
packed, or otherwise prepared 
for sale. 

(24) "Shucking and packing 
plant" means any 
establishment or place where 
shellfish are shucked and 
packed for sale. 

(25) "Wet storage" means the 
temporary storage of 
shellstock from permitted or 
approved sources , in approved 
natural sea water. 

.0802 PERMITS 

(a) No person shall operate 
any of the following facilities 
without a permit issued by the 
division : 

(1) Depuration facilities. 

(2) Shellstock plants. 

(3) Shucking and packing 
plants . 

(4) West storage areas. 

(5) Repacking plants. 

(b) No person shall operate as 
a shellstock dealer without a 
permit issued by the division. 

(c) A permit may be issued to 
a reshipper when required for 
out of state shipment. 

(d) Application for a permit 
shall be submitted in writing to 
the division at the Shellfish 
Sanitation Office, Fisheries 
Building, Arendell Street, 
Morehead City, North Carolina, 
28557. Application forms are 
available from the division. 

(e) No permit shall be 
issued by the division until an 
inspection shows that the 
facilities and equipment comply 
with all applicable rules of 
this Subchapter. 

(f) All permits shall be 
posted in a conspicuous place in 
the facilities. All permits 
shall expire on April 30 of each 
year . 

(g) Plans and specifications 
for proposed new construction or 
remodeling shall be submitted to 
the division for review and 
approval . 

(h) A permit may be 



revoked or suspended pursuant to 
G.S. 130A-23. 

.0803 REMOVAL OF SHELLFISH 
No person shall take shellfish 
from any shellfish grounds or 
any public waters which have not 
been approved by the division 
unless the person has a permit 
for such purpose under Rule 
.0004 or .0805 of these Rules. 

.0804 RELAYING PERMITS 
If a person is granted a 
relaying permit by the division 
and the Department of Natural 
Resources and Community 
Development, shellfish may be 
removed from certain designated 
prohibited areas for 
conditioning and purification 
prior to marketing and marketed 
after relaying in a large body 
of clean water, but only under 
the following conditions: 

(1) Application for relaying 
must be received by the North 
Carolina Department of 
Natural Resources and 
Community Development and the 
division 15 days prior to 
relaying . 

(2) No permits shall be 
issued for removal of 
shellfish from prohibited 
areas during the open market 
season . 

(3) Removal and relaying 
shall be under the 
supervision of the division 
and the Department of Natural 
Resources and Community 
Development . 

(4) Shellfish relayed from a 
prohibited area to a 
designated area of approved 
water shall remain down for a 
period of not less than 
fourteen days when the water 
in which shellfish are 
relayed lias a temperature 
above 50«F (10»C). When the 
water temperature is below 
50»F (10»C), shellfish shall 
not be relayed. 

(5) Permission to relay 
shellfish shall be given only 
to persons who have not been 
convicted of harvesting 
shellfish from prohibited 
areas within the past 12 
months . 

.0805 DEPURATION HARVESTING 
PERMITS 

If a person is granted a 
depuration harvesting permit by 
the division and the Department 
of Natural Resources and 
Community Development, shellfish 
may be removed from certain 
designated prohibited areas for 
depuration prior to marketing 
and marketed after depuration in 



NORTH CAROLINA REGISTER 



447 



a permitted facility, but only 
under the following conditions: 

(1) Application for a 
depuration harvesting permit 
must be received by the North 
Carolina Department of 
Natural Resources and 
Community Development and the 
division 15 days prior to 
harvesting for depuration 
purposes . 

(2) Harvesting for depuration 
purposes shall be under the 
supervision of the division 
and the Department of Natural 
Resources and Community 
Development . 

(3) Permission to harvest 
shellfish for depuration 
purposes shall be given only 
to persons who have not been 
convicted of harvesting 
shellfish from prohibited 
areas within the past 12 
months . 

.0806 APPEALS PROCEDURE 
Appeals concerning the 
interpretation and enforcement 
of the rules in this Subchapter 
shall be made in accordance with 
G.S. 150B and 10 NCAC IB. 

SECTION .0900 - SANITATION OF 

SHELLFISH - GENERAL OPERATION 

STANDARDS 

.0901 APPLICABILITY OF RULES 
The rules in this Section 
shall apply to the operation of 
all facilities and persons 
permitted in Rule .0802. 

.0902 GENERAL REQUIREMENTS FOR 
OPERATION 

(a) During the operating 
season the plant shall be used 
for no purpose other than the 
handling of shellfish. All 
unnecessary equipment and 
materials shall be removed from 
the plant and the floors kept 
clear for thorough cleaning. 

(b) All floors, walls, 
shucking benches and stools, 
shucking blocks, tables, 
skimmers, blowers. colanders, 
buckets, or any other equipment 
or utensils used in the 
processing operation shall be 
cleaned and sanitized daily, or 
more frequently as may be 
necessary during the day's 
operation to prevent the 
introduction of undesirable 
microbiological organisms and 
filth into the shellfish 
product . 

(c) Ceilings and windows shall 
also be kept clean. 
Refrigerators, refrigeration 
rooms, and ice boxes shall be 
washed and sanitized. 

(d) Wheelbarrows, measures, 



baskets, shovels, and other 
implements used in the handling 
of shellstock shall not be used 
for any other purpose and shall 
be cleaned and stored in the 
shellstock room when not in use . 

.0903 SUPERVISION 
The owner or manager shall 
either personally supervise or 
shall designate an individual 
whose principal duty shall be to 
supervise and be responsible for 
compliance with the rules of 
this Subchapter. No 

unauthorized persons shall be 
allowed in the plant during 
periods of operation. 

.0904 CONSTRUCTION 
Shellfish plants shall be 
adequate in size and 
construction to permit 
compliance with the operational 
provisions of this Subchapter. 

.0905 PLANT LOCATION 
Shellfish plants shall be 
located so that they will not be 
subject to flooding by high 
tides . 

.0906 FLOORS 

Floors shall be of 
concrete or other equally 
impervious material, constructed 
so that they may be easily and 
thoroughly cleaned and shall be 
sloped so that water drains 
completely and rapidly. For new 
construction, the joints between 
walls and floors shall be 
rounded to expedite cleaning. 

.0907 WALLS AND CEILINGS 

Walls to a height of at 
least two feet above the floor 
shall be constructed of smooth 
concrete or other equally 
impervious material. The 
remainder of the walls and 
ceilings shall be smooth 
concrete, cement plaster, or 
other material approved by the 
division and shall be painted 
with a light 
paint . 



color washable 



.0908 LIGHTING 

Natural or artificial 
lighting shall be provided in 
all parts of the plant. Light 
bulbs, fixtures, or other glass 
suspended within the plant shall 
be safety type or otherwise 
protected to prevent 
contamination in case of 
breakage. Lighting intensities 
shall be a minimum of 25 foot 
candles on working surfaces in 
packing and shucking rooms. 

.0909 VENTILATION 
Ventilation shall be 



448 



NORTH CAROLINA REGISTER 



provided to eliminate odors and 
condensation. 

.0910 FLY CONTROL 

All outside openings shall be 
screened, provided with wind 
curtains or be provided with 
other fly control methods 
approved by the division. All 
screens shall be kept in good 
repair. All outside doors shall 
open outward and shall be 
self-closing. The use and 
storage of pesticides shall 
comply with all applicable state 
and federal guidelines. 

.0911 RODENT AND ANIMAL 
CONTROL 

The plant shall be 
constructed to prevent entrance 
of rodents and other vermin. 
The storage and use of 
rodenticides shall comply witli 
all applicable state and federal 
guidelines. No animals shall be 
allowed in the plant at any 
time . 

.0912 PLUMBING 

All plumbing shall be done in 
compliance with applicable 
plumbing codes. 

.0913 WATER SUPPLY 

(a) The water supply shall be 
from a source approved by the 
division . 

(b) The water supply used 
shall be located, constructed, 
maintained, and operated in 
accordance witli the Commission 
for Health Services' rules 
governing water supplies. 
Copies of 10 NCAC 1 0A .1700 and 
10 NCAC 10D .0600 through .2500 
as amended through January 1 , 
1987 may be obtained from the 
Division of Health Services, 
Department of Human Resources, 
P. 0. Box 2091, Raleigh, North 
Carolina 27602-2091 . 

.0914 TOILET FACILITIES 
Separate and adequate toilet 
facilities shall be provided for 
each sex employed and shall 
comply with the N.C. State 
Building Code, Volume 2, 
Plumbing. Floors, walls, and 
ceilings shall be smooth, easily 
cleanable and kept clean. 
Fixtures shall be kept clean. 
All toilet wastes and other 
sewage shall be disposed of in a 
public sewer system or in the 
absence of a public sewer 
system, by an on site sewage 
disposal system approved by the 
division or the Department of 
Natural Resources and Community 
Development in accordance with 
G.S. 130A-335. 



.0915 WASTE DISPOSAL 
Shells, washings, and other 
wastes shall bo disposed of in a 
sanitary landfill or in a 
sanitary manner approved by the 
division . 

.0916 PERSONAL HYGIENE 

(a) All employees shall wash 
their hands thoroughly with soap 
and running water before 
beginning work and again after 
each interruption. Signs to 
this effect shall be posted in 
conspicuous places in the plant 
by the operator. 

(b) Additionally, all persons 
handling shucked shellfish shall 
sanitize their hands before 
beginning work and again after 
each interruption. 

(c) All persons employed or 
engaged in the handling, 
shucking, or packing of 
shellfish shall wear clean, 
washable outer clothing. Clean 
plastic or rubber aprons, 
overalls, and rubber gloves 
shall be considered 
satisfactory . 

(d) Employees shall not use 
tobacco in any form in the rooms 
where shellfish are stored, 
processed, or handled. 

(e) All persons known to be 

a carrier of any disease which 
can be transmitted through the 
handling of shellfish or who 
have an infected wound or open 
lesion on any exposed portion of 
their bodies shall be prohibited 
from handling shellfish. 

.0917 LOCKERS 

A separate room or locker shall 
be provided for storing 
employees' street clothing, 
aprons, gloves, and personal 
art icles . 

.0918 SUPPLY STORAGE 

Storage room shall be provided 
for storing shipping containers, 
tags, and other supplies. 

.0919 HARVEST BOATS 

All boats used in the 
harvesting and handling of 
shellstock shall be kept clean 
and repaired such that the 
shellstock thereon shall not be 
subject to adulteration by bilge 
water, by leakage of water from 
prohibited areas, or by other 
means. Decks, holds, or bins 
used for shellstock on boats 
shall not be washed with water 
from prohibited areas. Human 
wastes shall not be discharged 
into shellfish waters. 

.0920 TRANSPORTING SHELLSTOCK 
Ca) All shellstock storage 



NORTH CAROLINA REGISTER 



449 



areas in trucks, buy boats, buy- 
trucks, trailers, and other 
conveyances used for 
transporting shellstock shall be 
enclosed, tightly constructed, 
painted with a light color 
washable paint, kept clean, and 
shall be subject to inspection 
by the division. 

(b) Shellstock shall be 
shipped 

under temperature and sanitary 
conditions in accordance with 
these Rules which will keep them 
alive and clean and will prevent 
adulteration or deterioration. 
During the months of April 
through October, inclusive, all 
shellstock shall be kept under 
mechanical refrigeration at a 
temperature of 50«F (10»C) or 
below. All conveyances used to 
transport shellstock shall be 
equipped with an operating 
thermometer . 

(c) Buy boats and buy trucks 
shall be kept clean with water 
from a source approved by the 
division under Rule .0913 of 
this Subchapter. Buy boats and 
buy trucks shall provide storage 
space for clean shipping 
containers, identification tags, 
and records . 

.0921 DAILY RECORD 
All permitted persons who 
conduct any wholesale business 
of buying, selling, or shipping 
shellfish shall keep an 
accurate, daily record which 
shall show the names and 
addresses of all persons from 
whom shellfish are received, the 
location of the source of 
shellfish, and the names and 
addresses of all persons to whom 
shellfish are sold or shipped. 
These records shall be recorded 
in a permanetly bound ledger and 
shall be kept on file for one 
year. All records shall be open 
to inspection by the division at 
any time during business hours. 

.0922 SHELLSTOCK CLEANING 
No person shall offer for sale 
any shellstock which have not 
been washed free of bottom 
sediments and detritus. 

.0923 SALE OF LIVE SHELLSTOCK 
Only live shellstock shall 
be offered for sale. 

.0924 SHELLFISH RECEIVING 
No person shall receive or 
accept any shellfish unless the 
container or package bears the 
tag or label required by these 
Rules. This rule does not apply 
to the receipt of shellstock 
from a harvester to a permitted 
dealer . 



.0925 TAGGING 

(a) In order that information 
may be available to the division 
with reference to the origin of 
shellstock, containers holding 
shellstock shall be identified 
with a uniform tag or label . If 
shellstock is sold directly to 
the final consumer, the 
permitted dealer must display 
its name, address, and permit 
number in full view of the 
buying public, in lieu of 
individual shipping tags. If 
shellstock is to be resold or 
sold to a commercial 
establishment, each individual 
package must be labeled or 
tagged with the required 
information . 

(b) The information upon the 
tag or label shall include the 
name and address of shipper, 
permit number issued by the 
division, together with the 
state abbreviation, date of 
harvesting, date of shipment or 
of reshipment, and name of the 
waters from which the shellfish 
were harvested. 

(c) The stub of the tag shall 
not be removed from any package 
of shellstock until all of the 
contents of the package have 
been removed. Tags shall be 
durable, waterproof, and 
legible . 

(d) All shellstock from a 
depuration plant must be 
identified as having been 
cleansed by a depuration plant 
attested by a name and permit 
number on the tag. 

.0926 BULK SHIPMENTS 

Shipment in bulk shall not be 
made except where the shipment 
is from only one consignor to 
one consignee and accompanied by 
the uniform shipping tag. 

.0927 SHELLSTOCK STORAGE 
Shellstock held in wet or dry 
storage must be kept so that 
they will not become 
adulterated. All shellstock 
held in dry storage during the 
months of April through October, 
inclusive, shall be kept under 
mechanical refrigeration at a 
temperature of 50»F (10»C) or 
below. Refrigeration rooms and 
trucks shall be equipped with 
operating thermometers. 

.0928 SAMPLING AND TESTING 
Samples of shellfish may be 
taken and bacteriologically 
examined for any public health 
reason by agents of the division 
at any time or place. Samples 
of shellfish shall be furnished 
by operators of plants, trucks, 



450 



NORTH CAROLINA REGISTER 



carriers, stores, restaurants, 
and other places where shellfish 
are sold. 

.0929 STOPSALE OR DISPOSAL OF 
SHELLFISH 

(a) Shellfish or shellfish 
products processed or prepared 
for sale to the public 
determined to be adulterated or 
misbranded shall be subject to 
stopsale or disposal by the 
division. The division may 
temporarily or permanently issue 
an order to stop sale or 
condemn, destroy, or otherwise 
dispose of all shellfish or 
shellfish containers found to be 
adulterated or misbranded. 

(b) All shellfish shall be 
disposed of in a manner 
prescribed by the division or by 
a court of appropriate 
jurisdiction . 

.0930 BACTERIOLOGICAL 
STANDARDS AND 
ENFORCEMENT PROCEDURES 

(a) Shellfish shucked or in 
the shell and intended or 
offered for sale in North 
Carolina that exceed an 
Escherichia coli Most Probable 
Number of 230 per 100 grams of 
sample or a total bacteria count 
of more than 500,000 per gram or 
contain pathogenic organisms in 
sufficient numbers to be 
hazardous to the public health 
shall be deemed adulterated by 
the division. Shellfish 
contaminated by any other 
substance which renders it 
unsafe for human consumption 
shall be deemed adulterated by 
the division. 

(b) When it has been 
determined by the division that 
shellfish have not been grown, 
harvested, stored, treated, 
transported, handled, shucked, 
packed or offered for sale in 
compliance with 10 NCAC 1 0B 
.0800 through .1304 of this 
Subchapter, those shellfish 
shall be deemed adulterated. 

.0931 STANDARDS FOR AN 

APPROVED SHELLFISH 
GROWING AREA 
In order that an area be 
approved for shellfish 
harvesting for direct market 
purposes there are certain 
criteria that must be satisfied 
as indicated by sanitary survey: 

(1) the shoreline survey has 
indicated that there is no 
significant point source 
contamination (sewage 
treatment outfall, farm 
drainage ditches, marina, 
etc. ) ; 

(2) the area is not so 



contaminated with fecal 
material that consumption of 
the shellfish might be 
hazardous ; 

(3) the area is not so 
contaminated with 
radionuclides or industrial 
wastes that consumption of 
the shellfish might be 
hazardous; and 

(4) the median fecal coliform 
Most Probable Number (MPN) or 
the geometric mean MPN of 
water shall not exceed 14 per 
100 milliliters, and not more 
than 10 percent of the 
samples shall exceed a fecal 
coliform MPN of 43 per 100 
milliliters (per five tube 
decimal dilution) in those 
portions of areas most 
probably exposed to fecal 
contamination during most 
unfavorable hydrographic 
condit ions . 

SECTION .1000 - OPERATION OF 

SHELLSTOCK PLANTS AND 

RESHIPPERS 

.1001 GENERAL REQUIREMENTS 
The rules in Section .0900 
shall apply for the operation of 
shellstock plants and 
reshippers . 

.1002 GRADING SHELLSTOCK 

(a) The grading of shellstock 
shall be conducted only in a 
permitted shellstock plant. 

(b) A separate grading room or 
area shall be required for the 
grading of shellstock. 

.1003 GRADER 

The grader used to grade 
shellstock, and any other 
accessories or tables used in 
the grading operation, shall be 
constructed for ease of cleaning 
and shall be properly 
maintained . 

.1004 RESHIPPERS 

(a) If shellstock is handled, 
all applicable requirements 
outlined for shellstock plants 
shall be met. When shucked 
shellfish are handled, they 
shall be obtained from a 
permitted shipper. The shucked 
shellfish shall be received in 
approved shipping containers at 
a temperature of 40«F (4»C) or 
below. The temperature of the 
shellfish shall not exceed 40»F 
(4»C) during the holding and 
shipping periods. 

(b) Reshippers shall keep 
adequate and accurate records 
indicating the source from which 
shellfish were purchased, the 
date purchased, the name of the 
waters from which the shellfish 



NORTH CAROLINA REGISTER 



451 



were harvested, and the names 
and addresses of persons to whom 
the shellfish were sold. 

SECTION .1100 - OPERATION OF 

SHELLFISH SHUCKING AND PACKING 

PLANTS AND REPACKING PLANTS 

.1101 GENERAL REQUIREMENTS 
The rules in Section .0900 
shall apply for the operation of 
shucking and packing plants and 
repacking plants. 

.1102 SEPARATION OF OPERATIONS 
A shucking and packing plant 
shall provide separate rooms for 
shellstock storage. shucking, 
heat shock, and general storage. 
A separate packing area with 
delivery shelf shall be 
required . 

.1103 HOT WATER SYSTEM 
An automatically regulated hot 
water system shall be provided 
which has sufficient capacity to 
furnish water at a temperature 
of at least 130»F (54»C) during 
all hours of plant operation. 

.1104 HANDWASHING FACILITIES 

Handwashing facilities, 
including lavatories, hot and 
cold running water (combination 
supply faucet), soap, and 
individual towels shall be 
provided in a convenient place 
in the shucking and packing 
rooms. Signs requiring 
handwashing shall be 
conspicuously displayed within 
the plant . 

.1105 DELIVERY WINDOW OR SHELF 

A delivery window or a 
non-corrosive shelf shall be 
installed in the partition 
between the shucking room and 
packing area. No shuckers or 
unauthorized personnel shall be 
allowed in the packing room or 
area. The delivery window shall 
be equipped with a shelf 
completely covered with smooth, 
non-corrosive metal or other 
material approved by the 
division for such purpose, 
sloped to drain towards the 
shucking room. 

.1106 NON-FOOD CONTACT 
SURFACES 

All non-food contact surfaces 
of equipment shall be 
non-absorbent, and constructed 
to be easily cleaned. 

.1107 SHUCKING BENCHES 
Shucking benches, tables, and 
contiguous walls to a height of 
at least two feet above the 
bench top, shall be of smooth 
concrete, non-corrosive metal. 



or other durable non-absorbent 
material, free from cracks and 
pits, and so constructed that 
drainage is complete and rapid 
and is directed away from the 
stored shellfish. Shucking 
blocks shall be solid, one-piece 
construction, removable, and 
easily clcanable. The stands, 
stalls and stools shall be of 
smooth material and shall bo 
painted with a light colored 
washable paint . 

.1108 EQUIPMENT CONSTRUCTION 

(a) All pails, skimmers, 
measures, tanks, tubs, blowers, 
paddles, and other equipment, 
which come into contact with 
shucked shellfish or with ice 
used for direct cooling of 
shellfish, shall be made of 
smooth, non-corrosive, 
impervious materials and 
constructed so as to be easily 
clcanable and shall be kept 
clean and in good repair. 

(b) All equipment, including 
external and internal blower 
lines and hoses below a point 
two inches above the overflow 
level of the tank and blower 
drain valves, shall be 
constructed as to be easily 
cleanable; and there shall be no 
V-type threads in the 
food-product zone of the blower . 

tc) The blower and skimmer 
drain shall not be directly 
connected with the sewer. There 
shall be an air gap, approved by 
the division, between the blower 
and/or skimmer outlet. A floor 
drain shall be provided. 

(d) Air-pump intakes shall be 
located in a place protected 
from dirt and other 
contamination, and shall be 
equipped with filters . 

.1109 SANITIZING EQUIPMENT 

Washing and sanitizing 
facilities, including a 
three-compartment wash sink of 
adequate size to wash the 
largest utensils and pots used 
in the plant shall be provided 
in a section of the plant 
convenient to the work areas. 
The sink shall be kept in good 
repair. Permanent hot and cold 
water connections, with 
combination supply faucets, 
shall be installed so that all 
vats may receive hot and cold 
water. Either steam, hot water, 
or a sanitizing solution shall 
be used to sanitize utensils and 
equipment . 

.1110 EQUIPMENT SANITATION 
All utensils and tools, such as 
opening knives, shucking pails, 
measures, skimmers, colanders, 



452 



NORTH CAROLINA REGISTER 



tanks, tubs, paddles, and 
containers which come in contact 
with the shellfish shall be 
thoroughly cleaned and then 
sanitized : 
( 1 ) by steam in a steam 

chamber or box equipped with 
an indicating thermometer 
located in the coldest zone, 
by exposure to a temperature 
of 170»F (76»C) for at least 
15 minutes, or to a 
temperature of 200»F (93«C) 
for at least five minutes; 

(2) by immersion in hot water 
at a temperature of 170«F 
(76»C) for at least two 
minutes (a thermometer is 
required ) ; 

(3) by immersion for at least 
one minute in. or exposure 
for at least one minute to. a 
constant flow of a solution 
containing not less than 100 
parts per million chlorine 
residual . Utensils and 
equipment which have to be 
washed in place will require 
washing, rinsing, and 
sanitizing; or 

(4) by a bactericidal 
treatment method which will 
provide equivalent 
sanitization to that provided 
by the methods authorized in 
(a)(1), (a)(2), or (a)(3) . as 
determined by the division. 
If the bactericidal immersion 
or spray treatment is 
employed, testing kits shall 
be used to ensure that 
minimum solution strengths 
are maintained throughout the 
cleaning process . 

.1111 EQUIPMENT STORAGE 
Equipment and utensils which 
have been cleaned and given 
bactericidal treatment shall be 
stored to protect against 
contaminat ion . 

.1112 ICE 

Ice shall be obtained from a 
a water supply approved by the 
division pursuant to Rule .0913 
of this Subchapter and shall be 
stored and handled in a sanitary 
manner . 



.1113 SHELLFISH SHUCKING 

(a) Shellfish shall be shu 
in a manner that they are 
subject to adulterat 
Shellstock shall be reason 
free of mud when shucked . 
live shellstock shall 
shucked . 

(b) Shucking of shellstock 
shall only be permitted 
approved shucking tables 
benches. Floors used 
shuckers shall not be used 
the storage of shellfish or 



eked 
not 
ion . 
ably 
Only 
be 



on 

or 

by 

for 

the 



retention of shucking pails or 
other food contact containers. 

(c) When shellstock are stored 
in the shucking room, protection 
shall be provided for the 
storage space to prevent 
possible adulteration from wash 
water wastes and from the feet 
of the employees. 

(d) Shucking pails shall be 
placed so as to exclude the 
drippings from shells and from 
the hands of shuckers . The 
pails shall be rinsed with 
running tap water before each 
filling . 

(e) Shucked shellfish, when 
washed, shall be thoroughly 
washed on a skimmer or a 
container approved by the 
division with cold running water 
from a source approved by the 
division under Rule .0913 of 
this Subchapter. 

(f) The return of overage from 
packing is not permitted. 

(g) If blowers are used for 
cleansing, the total time that 
shellfish are in contact with 
water after leaving the shucker, 
including the time of washing, 
rinsing, and any other contact 
with water shall not be more 
than 30 minutes. In computing 
the time of contact with water, 
the length of time that 
shellfish are in contact with 
water that is agitated by 
blowing or otherwise, shall be 
calculated at twice its actual 
length. Before packing into 
containers for shipment or 
delivery for consumption, the 
shellfish shall be drained and 
packed without any added 
substance . 

( h ) Pre-cooling of shucked 
shellfish shall be done in 
equipment which meets National 
Sanitation Foundation standards 
or the equivalent. 

.1114 CONTAINERS 

(a) Containers used for 
transporting shucked shellfish 
shall be approved by the 
division. These containers 
shall not be reused for packing 
shellfish . 

(b) Shucked shellfish shall be 
packed and shipped in approved 
containers, sealed so that 
tampering can be detected. Each 
individual container shall have 
permanently recorded on the 
container, so as to be 
conspicuous, the 
shucker-packer ' s , repackcr's, or 
distrib jtor ' s name and address, 
and the shucker-packer ' s or 
repacker's permit number 
preceded by the state 
abbreviation . 

(c) Any container of shucked 



NORTH CAROLINA REGISTER 



453 



shellfish which has a capacity 
of more than 64 fluid ounces 
shall be dated as of the date 
packed on both the lid and 
sidewall or bottom. Any 
container of shucked shellfish 
which has a capacity of 64 fluid 
ounces or less shall indicate a 
SELL BY date. 

(d) No person shall use 
containers bearing a permit 
number other than the number 
assigned to him. 

.1115 SHELLFISH COOLING 
Shucked shellfish shall be 
cooled to an internal 
temperature of 45«F (7«C) or 
less within two hours after 
delivery to the packing room. 
Storage temperatures shall be 
32* - 40»F (0» - 4»C). No ice 
or other foreign substance shall 
be allowed to come into contact 
with the shellfish after 
processing has been completed. 

.1116 SHELLFISH FREEZING 

(a) Shellfish shall be frozen 
within three days of shucking 
and packing and the pack date 
shall be preceded by the letter 
(F). 

(b) Frozen shellfish shall not 
be thawed for resale or be 
repacked . 

(c) A temperature of 0»F (-18 
•C) or less shall be maintained 
in the frozen storage rooms . 

.1117 SHIPPING 

(a) Shucked shellfish shall be 
stored and shipped at 
temperatures between 32» - 40»F 
(0. - 4»C) . 

(b) Shipments shall be tagged 
or labeled to show the name and 
address of the consignee, the 
name and address of the shipper, 
the name of the state or 
territory of origin, and the 
permit number of the shipper. 

.1118 HEAT SHOCK METHOD OF 

PREPARATION OF SHELLFISH 

(a) Facilities. If a shucking 
and packing plant uses the heat 
shock process, it shall be done 
in an separate room adjacent to 
the shellstock storage room and 
the shucking room, approved by 
the division for such purpose. 

(b) Tank construction. The 
heat shock tank shall be 
constructed of smooth, 
non-corrosive metal, designed to 
drain quickly and completely and 
to be easily and thoroughly 
cleaned . 

(c) Booster heaters. All heat 
shock tanks shall be equipped 
with suitable booster heaters 
that are thermostatically 
controlled . 



(d) Shellstock washing. All 
shellstock subjected to the heat 
shock process shall be 
thoroughly washed with flowing 
potable water immediately prior 
to the heat shock operation. 

(e) Water temperature. During 
the heat shock process the water 
shall be maintained at not less 
than 145»F (63«C) or more than 
150»F (65«C). An accurate 
thermometer shall be available 
and used to determine the 
temperature during the heat 
shock process. All water shall 
be completely drained from heat 
shock process. All water shall 
be completely drained from heat 
shock tanlcs and the tanks 
cleaned at least once in each 
three hour operational period or 
more often if necessary. 

(f) Time requirements. 
Shellstock subjected to the heat 
shock process shall not be 
immersed in the heat shock water 
longer than three and one half 
minutes. An accurate timing 
device shall be available and 
used to determine the immersion 
time . 

(g) Alternatives to heat shock 
method. Nothing in these Rules 
shall be construed to prohibit 
any other process which has been 
found equally effective and has 
been approved by the division. 

(h) Water requirements. At 
least eight gallons of heat 
shock water shall be maintained 
in the tank for each one half 
bushel of shellstock being 
treated. All water used in the 
heat shock process shall be from 
a source approved by the 
division under Rule .0913 of 
this Subchapter. 

(i) Cooling. Immediately 
after the heat shock process, 
all treated shellstock shall be 
subjected to a cool-down with 
potable tap water. All heat 
shocked shellstock shall be 
handled in a manner to prevent 
adulteration of the product. 
Shellfish which have been 
subjected to the heat shock 
process shall be cooled to an 
internal temperature of 45»F 
(7»C) or below within two hours 
after this process and shall be 
placed in storage at 32* - 40»F 
(0. - 4»C) . 

(j) Cleaning. At the close of 
each day's operation, the heat 
shock tank shall be completely 
emptied of all water, mud, 
detritus, and thoroughly cleaned 
and then rinsed with flowing 
potable water. Water, mud, 
detritus, and other by-products 
shall be disposed of in a manner 
approved by the division. 

(k) Sanitizing. All heat 



454 



NORTH CAROLINA REGISTER 



shock tallies shall bo sanitized 
immediately before starting each 
day's operation. 

(1) Records. Adequate records 
of heat shock processes shall be 
kept as required by the 
division . 

.1119 REPACKING OF SHELLFISH 

(a) If repacking is practiced, 
it shall be done strictly in 
accordance with all the 
requirements stipulated for 
shucking and packing plants 
except those related to 
shucking . 

(b) The shucked shellfish to 
be repacked shall be received at 
the repacking plant in approved 
shipping containers at a 
temperature of 32» - 40»F (0» - 
4«C ) or less . 

Cc) Shellfish shall not be 
repacked more than one time. 

(d) The temperature of the 
shellfish shall not exceed 45»F 
(7»C) during the repacking 
process . 

(e) Containers with a capacity 
of 64 fluid ounces or less in 
which shucked shellfish are 
repacked shall indicate a SELL 
BY date preceded by the letter 
R. Containers with a capacity 
above 64 fluid ounces in which 
shucked shellfish are repacked 
shall be dated to show the 
original packing date and 
repacking date, which will be 
preceded by the letter (R). 

(f) Repackers shall keep 
accurate records indicating 
source from which shellfish were 
purchased, the date packed, the 
date of purchase, the area 
within the state or territory 
from which the shellfish were 
harvested, and the names and 
addresses of persons to whom the 
shellfish were sold. 

SECTION .1200 - OPERATION OF 

DEPURATION (MECHANICAL 

PURIFICATION) 

FACILITIES 

.1201 GENERAL REQUIREMENTS 
The rules in Section .0900 

shall apply for the operation of 

depuration facilities. 

.1202 FACILITY SUPERVISION 

(a) The owner shall either 
personally supervise or 
designate an individual to be 
responsible for compliance with 
the rules of this Subchapter. 

(b) The depuration facility 
shall be used for no purpose 
other than the treatment of 
shellfish and research 
activities related thereto. No 
unauthorized persons shall be 



allowed in 
facility . 



the depuration 



.1203 FACILITY DESIGN AND 
SANITATION 

(a) The plant layout shall be 
designed to physically separate 
undepurated shellstock from 
depurated shellstock and be 
approved by the division. 

(b) Tank design and 
construction. The tank shall be 
designed to allow for good water 
circulation. The tank shall be 
of sufficient size to allow at 
least eight cubic feet of sea 
water per bushel of shellstock 
in the tank except for soft 
clams (Myaarenaria ) , which 
requires at least five cubic 
feet of sea water per bushel . 
If the tank is rectangular in 
shape, length to width ratio 
shall be from two to one (2:1) 
to four to one (4:1). 

(c) The tank shall be designed 
so that scum and sludge 
(shellfish feces, pseudo feces, 
sand grit, etc.), can be easily 
removed or flushed out . The 
bottom shall be sloped 
longitudinally at least one 
fourth to one half inch per foot 
toward the outlet end. 

(d) To facilitate proper 
cleaning and sanitation, as well 
as proper depuration of 
shellfish, tanks shall be 
constructed from impervious, 
non-toxic, and inert materials. 
Coatings, when used, shall be 
approved by the division. Pipes 
conveying process water 
throughout the plant shall be so 
constructed as to be easily 
disassembled to facilitate 
cleaning and sanitizing. 

(e) Facility sanitation. The 
general sanitation requirement 
of the facility, physical 
structure, equipment and 
utensils, and the sanitary 
requirements for operations, 
processes. and personnel shall 
be approved by the division. 

(f) Material. The equipment 
in the food product zone shall 
be made of smooth, corrosion 
resistant, impervious, non-toxic 
material and shall meet National 
Sanitation Foundation standards 
or the equivalent . 

(g) Plumbing and related 
facilities. Plumbing shall be 
installed in compliance with 
state and local plumbing 
ordinances. Lavatories shall 
have running hot and cold water. 
Lavatories, other than those 
located in restrooms, shall be 
located so that their use by 
personnel can be readily 
observed. An automatically 
regulated hot water system shall 



NORTH CAROLINA REGISTER 



455 



be provided which has sufficient 
capacity to furnish water at a 
temperature of at least 130!F 
(54!C) during all hours of plant 
operation. Signs shall be 
posted in toilet rooms and near 
lavatories, directing employees 
to wash their hands before 
starting work and after each 
interruption. Pump volutes and 
impellers shall be of material 
which is non-toxic. The 
facilities domestic sewage shall 
be discharged into a sewage 
disposal system constructed in 
accordance with state and local 
requirements . 

(h) Floors. Floors of rooms 
in which shellstock are handled 
or stored shall be constructed 
of concrete or other material 
impervious to water; shall be 
graded to drain quickly; shall 
be free from cracks and uneven 
surfaces that interfere with 
proper cleaning or drainage; and 
shall be maintained in good 
repair . 

(i) Walls and ceilings. The 
interior surfaces of rooms in 
which shellstock are handled or 
stored shall be smooth, 
washable, a light color, and 
kept in good repair. 

( j ) Lighting. Natural or 
artificial light shall be 
provided in all working and 
storage rooms. Light bulbs, 
fixtures, or other glass 
suspended within the facility 
shall be of safety-type or 
otherwise protected to prevent 
contamination in case of 
breakage. The water surface of 
the depuration tanks shall not 
be subjected to direct sunlight. 

(k) Heating and ventilation. 
Working rooms shall be 
ventilated. Working rooms shall 
be equipped with heating 
equipment for use as necessary 
during the months of September 
to April . 

(1) Water supply. The water 
supply for non-depuration uses 
shall be from a source approved 
by the division under Rule .0913 
of this Subchapter. 

(m) Rodent control. The 
depuration facility shall comply 
with the provisions of Rule 
.0911 of this Subchapter. 

(n) General cleanliness. The 
depuration facility shall be 
kept clean and free of litter 
and rubbish. Miscellaneous and 
unused equipment and articles 
which are not necessary to the 
facility operations shall not be 
stored in rooms used for 
depuration or shellstock 
storage. Culled shellstock 
shall be removed promptly from 
the facility. 



(o) Health of personnel. Any 
person known to be infected with 
any disease in a communicable 
form, or to be a carrier of any 
disease which can be transmitted 
through the handling of 
shellfish, or who has an 
infected wound or open lesion on 
any exposed portion of his body, 
shall be excluded from handling 
shellfish in the facility. 

(p) Disposal of all waste 
water shall be permitted by the 
appropriate agency. 

.1204 LABORATORY PROCEDURES 

(a) The laboratory and the 
laboratory operator shall be 
approved by the division. 

(b) The laboratory shall 
conduct routine bacterial 
examinations of process water 
and shellfish, and special 
examinations when necessary or 
required in accordance with Rule 
.1206 of this Subchapter. 

(c) Bacterial examinations of 
shellfish and sea water shall be 
made in accordance with 
"Recommended Procedures for 
Bacterial Examination of Sea 
Water and Shellfish", American 
Public Health Association, Inc., 
Fourth Edition, 1970, or other 
methods approved by the 



division . 
publ ication 
inspection 
Sanitation 
Building, 



A 

is 
at 

Office, 
Arendell 
North 



copy of this 

available for 

the Shellfish 

Fisheries 

Street , 

Carolina 



Morehead City, 
28557. 

(d) All other physical, 
chemical, or biological tests 
shall be conducted according to 
"Standard Methods for the 
Examination of Water and Waste 
Water", Fifteenth Edition, 1981, 
prepared and published by 
American Public Health 
Association, American Water 
Works Association, and Water 
Pollution Control Federation, or 
other methods approved by the 
division. A copy of this 
publication is available for 
inspection at the Shellfish 
Sanitation Office, Fisheries 
Arendell Street, 
North Carolina 



Building, 
Morehead City, 
28557. 



.1205 FACILITY OPERATIONS 
(a) Source of shellfish. 
Shellfish shall be accepted for 
treatment at a shellfish 
depuration facility only from 
areas designated for this 
purpose by the division. A 
detailed description of all 
areas from which shellfish may 
be taken for depuration 
purposes, updated as necessary, 
shall be prepared by the 



456 



NORTH CAROLINA REGISTER 



division and the Department of 
Natural Resources and Community 
Development, and filed with the 
facility owner or supervisor. 
The facility supervisor shall 
inspect all containers of raw 
shellstock upon arrival at the 
facility to verify that they 
contain the species and quantity 
stated on the surveillance 
officer's reports. 

(b) Shellstock containers. 
Shellstock shall be accepted for 
treatment and released after 
depuration in clean containers 
only. All containers shall be 
constructed of non-absorbent and 
rust-proof material, and kept 
clean and free from foreign 
matter. Burlap bags or similar 
absorbent material shall not be 
used for transporting shellstock 
to the depuration facility nor 
for the removal of shellstock 
from the facility. 

(c) Culling. All untreated 
shellstock prior to, or upon 
arrival at the facility, shall 
be thoroughly inspected and 
culled. All dead shellfish, or 
shellfish in broken or cracked 
shells shall be disposed of in a 
manner approved by the division. 
The owner or supervisor shall be 
held responsible for suitable 
culling, and for the removal and 
disposal of dead shellfish or 
shellfish in broken or cracked 
shells after depuration. 

(d) Washing shellstock. 
Before and after depuration all 
shellstock shall be thoroughly 
washed or hosed with water taken 
from a source approved by the 
division under Rule .0913 of 
this Subchapter. Immersion of 
shellstock for washing purposes 
is prohibited. 

(e) Depuration Baskets. All 
baskets used in the depuration 
process shall be made of 
impervious material and shall 
not be more than four inches 
deep. Baskets shall be of a 
design to allow water to flow 
freely over the shellstock in 
the depuration tanks. 
Shellstock shall not be placed 
more than three inches deep in 
the baskets. Baskets shall be 
stacked in a manner to allow 
free circulation of water. 
There shall be at least three 
inches clearance separating 
containers of shellfish in tanks 
and between the containers and 
the bottom and sides of the 
tank. containers used for 
depuration purposes shall not be 
used for any other purpose and 
no containers or other equipment 
shall be placed in the 
depuration tanks. 

(f) Depuration. All 



shellstock upon receipt at the 
depuration facility, shall be 
immediately placed in depuration 
or placed in controlled storage . 
Shellstock shall be depurated 
for a period of 48 hours or 
longer as required to meet the 
bacteriological standards 
established in Rule .1209 of 
this Subchapter. 

(g) Washing depuration tanks. 
After each 24 hours the sea 
water in the tanks shall be 
drained out and the shellstock 
hosed down thoroughly with water 
from a supply approved by the 
division under Rule .0913 of 
this Subchapter. All waste 
matter must be flushed out of 
the tank. Immediately after 
hosing, the tanks shall again be 
filled with treated sea water. 

Ch) Scheduled process. A 
scheduled control purification 
process shall be established 
outlining the critical 
parameters for each depuration 
facility. This scheduled 
process shall be written and 
posted conspicuously at the 
depuration site. 

.1206 SHELLFISH SAMPLING 
PROCEDURES 

(a) Start-up phase. When 
shellfish are delivered to the 
depuration facility, the 
following schedule shall be 
followed : 

( 1 ) One or more shellfish 
samples (12 or more 
shellfish per sample) shall 
be collected for bacterial 
examination before the 
shellfish are submitted to 
the depuration process. 

(2) Three or more shellfish 
samples. randomly selected 
from three or more locations 
in each tank, shall be 
collected for bacterial 
examination after 24 hours 
of depuration. 

(3) Three or more shellfish 
samples, randomly selected 
from three or more locations 
in each tank, shall be 
collected for bacterial 
examination after the 
shellfish have conpleted the 
depuration process. 

(b) The above schedule shall 
be followed until the time that 
the division and the facility 
supervisor, after review of the 
results, determine that the 
shellfish from the area(s) are 
responding properly to the 
depuration process, and that the 
depuration process is 
successfully reducing bacterial 
levels. After the 
determination, the routine 
sampling procedures shall be 



NORTH CAROLINA REGISTER 



457 



followed. A routine sampling 
procedure defining a program of 
daily sampling shall be 
established by the division. 
Written permission from the 
division must be obtained before 
the initiation of routine 
monitoring procedures. 

(c) In the event of the 
installation of a new 
laboratory, new laboratory 
equipment, employment of new 
laboratory personnel, initiation 
of new laboratory procedures, or 
the alteration of treatment or 
procedures, the division may 
require a reinitiation of the 
start-up phase procedures until 
the time that the division and 
the facility supervisor, after 
review of the results, determine 
that the laboratory and 
depuration procedures are 
providing satisfactory results. 
Written permission from the 
division shall be obtained 
before routine monitoring 
procedures are again followed. 

.1207 DEPURATION PROCESS WATER 
CONTROL - SAMPLING 
PROCEDURES 
The treatment of shellfish is a 
controlled process designed to 
reduce bacterial contamination 
to an acceptable level . To 
insure the continuing 
effectiveness of the shellfish 
depuration process, the minimum 
sampling procedure as described 
below shall be followed: 

(1) Incoming sea water; 

(a) type of test: 
temperature, turbidity, 
salinity, dissolved oxygen, 
bacteriological ; 

(b) frequency: each time sea 
water is withdrawn; 

(2) Tank water; 

(a) type of test : 
bacteriological ; 

(b) frequency: once per day 
per tank. 

.1208 DEPURATION TREATMENT 
PROCESS WATER - 
STANDARDS 

(a) Water Source. Depuration 
process water shall not exceed 
fourteen fecal coliform Most 
Probable Number (MPN) per 100 
milliliters of water prior to 
treatment . 

(b) Bacteriological. All 
water to be used in shellfish 
depuration tanks shall be 
subjected to ultraviolet light 
treatment . The tank water 
bacterial quality shall not 
exceed one total coliform Most 
Probable Number (MPN) per 100 
milliliters of water. 

(c) Dissolved oxygen. The 



amount of dissolved oxygen in 
the water in the depuration 
tanks shall be at least five 
milligrams per liter and shall 
be measured daily. 

(d) Temperature. Depuration 
tank temperature shall be 
measured daily during the 
depuration process. 
Temperatures of sea water used 
in the depuration process shall 
not be below 50!F (10!C) nor 
above 77!F (25!C) . 

(e) Turbidity. Turbidity in 
the depuration water shall not 
exceed 20 Jackson Turbidity 
Units or other equivalent 
methods and shall be measured 
daily . 

(f) Salinity. Salinity of the 
depuration water shall deviate 
no more than plus or minus 20^ 
of the value of the harvest area 
and shall be measured daily. 

(g) pH . pH of the depuration 
water shall range from 7.0 to 
8.4 and shall be measured daily. 

(h) Metallic ions and 
compounds. Levels of metallic 
ions and compounds shall not 
exceed levels found in approved 
shellfish harvesting areas and 
shall be measured if required by 
the division. 

(i) Pesticides, detergents, 
and radionuclides. Levels of 
pesticides, detergents, and 
radionuclides shall not exceed 
levels found in approved 
harvesting areas and shall be 
measured if required by the 
division . 

(j) Marine toxins. Levels of 
marine toxins in the incoming 
sea water and in the source 
water shall not exceed levels 
found in approved shellfish 
harvesting areas and shall be 
measured if required by the 
division . 

.1209 DEPURATION - SHELLFISH 
MEAT STANDARDS 

Shellfish shall not be 
released for sale if the 
geometric mean of the fecal 
coliform MPN of the treated 
shellfish samples exceeds 20 per 
100 grams of sample, or if more 
than 1 percent of the samples 
exceed a fecal coliform MPN of 
70 per 100 grams of sample, or 
if any sample fecal coliform MPN 
exceeds 100 per 100 grams of 
sample . 

( 1 ) The use of the Elevated 
Temperature Coliform Plate 
Count is authorized for the 
bacteriological evaluation of 
hard clams, Mercenaria 
species, and soft clam, Mya 
arenaria . 

(2) Should the division 



458 



NORTH CAROLINA REGISTER 



suspect adulteration of 
shellfish by metallic ions 
and compounds, pesticides, 
detergents, radionuclides, 
marine toxins, or any toxic 
substance or adulterate, the 
division shall require that 
shellfish meats be analyzed 
for these adulterants before 
suspect shellfish are 
released for sale. 

.1210 ULTRAVIOLET UNIT 
Any ultraviolet unit which 
provides the required treatment 
and desired results may be used 
for the purification of water to 
be used in the depuration 
process. The unit shall be 
designed to deliver, at peak 
load, at least one gallon per 
minute of treated water per 
bushel of shellfish, measured by 
an approved measuring device or 
method . 

(1) Cautions and maintenance. 
Ultraviolet tubes shall be 
checked for intensity on a 
monthly basis and shall be 
replaced when they reach a 
point of 60 percent 
efficiency. A log of 
intensity shall be kept and 
an orderly numbering 
procedure for units and bulb 
established . 

(2) Ultraviolet tubes and 
reflectors shall be cleaned 
as necessary. Cleaning may 
be done with a clean damp 
cloth or sponge. 

(3) Signs stating "Ultraviolet 
Light Danger to Eyes - Do Not 
Look at Bulbs Without Eye 
Protection" shall be 
displayed in full view of 
personnel and authorized 
visitors. Skin protection, 
especially for the face and 
hands, shall be provided for 
personnel monitoring the 
bulbs. Eye protection may be 
accomplished by use of 
ordinary glasses with solid 
side pieces or special 
goggles made for this 
purpose. Protection for the 
head may be afforded by a hat 
and hand protection may be 
accomplished by the use of 
gloves. Face protection may 
be afforded by the use of 
certain clear plastics. 

(4) An automatic shutoff 
switch shall be provided to 
break the electric current, 
this shutting off the current 
to the ultraviolet bulb when 
the lid of the ultraviolet 
unit is raised . 

(5) A clock, off-on current 
recorder, or other device 
approved by the division, 
shall be installed in line 



with all ultraviolet units to 
measure continuity of 
operation as well as to 
measure bulb life. 

.1211 SHELLSTOCK STORAGE 

(a) Refrigeration of 
shellstock. Treated shellstock 
shall be placed in cold storage 
if they are not released 
immediately. The temperature 
for cold storage shall be 50«F 
C10»C) or lower. A 
refrigerated storage room shall 
be provided for depurated 
shellstock. All untreated 
shellstock shall bo kept in a 
separate shellstock storage 
room. Measures shall be taken 
to prevent the unauthorized 
removal of any shellstock. All 
shellstock shall be handled and 
stored under sanitary conditions 
in accordance with the rules in 
this Subchapter. 

(b) Controlled storage. 
Shellstock which is received at 
the depuration facility which 
cannot be processed immediately 
shall be placed in controlled 
storage. In controlled storage 
the temperature shall be 50»F 
(10»C) or lower. A gradual 
change of temperature from the 
storage temperature to the 
depuration water temperature may 
then be necessary to insure 
proper treatment . Any 
shellstock which has been held 
under refrigeration at a 
depuration facility for more 
than 48 hours cannot be 
depurated . 

.1212 DEPURATION - TAGGING AND 
RELEASE OF SHELLFISH 

No shellstock shall be removed 
from the depuration facility 
until approved for release by 
the supervisor of the facility 
as provided in these Rules. All 
containers of depurated 
shellstock shall be tagged 
before being released from the 
shellstock depuration facility. 
The tag shall contain the name 
and permit number given the 
depuration facility by the 
division. the quantity of 
shellstock, and the date the 
shellstock were released from 
the depuration facility. 

.1213 DEPURATION - RECORDS 
Records containing the 
following information shall be 
available at the depuration 
facility at all times: 
(1) Fo: shellstock presently 
undergoing the depuration 
process : 

(a) name and location of 
harvesting area(s); 

(b) depuration harvesting 



NORTH CAROLINA REGISTER 



459 



permit number ( s ) ; 

(c) date received; 

(d) quantity of shellstock 
in tank( s ) ; and 

(e) date and time of 
initiation of depuration. 

(2) For each lot of shellstock 
which have completed the 
depuration process: 

(a) name and location of 
harvesting area(s); 

(b) depuration harvesting 
permit number(s); 

(c) date received into 
facility; 

(d) date released from the 
facility; 

(e) date and time of 
initiation of depuration; 

(f) date and time of 
termination of depuration; 

(g) number of hours 
depurated; and 

(h) all laboratory results 
as specified. 

(3) Every two weeks the 
facility supervisor shall 
send to the division a copy 
of the daily records required 
under this Rule and the 
results of all shellfish and 
water samples analyzed during 
that biweekly period. 

SECTION .1300 - WET STORAGE 

OF 

SHELLSTOCK 

.1301 GENERAL REQUIREMENTS 
The rules in Section .0900 

shall apply for wet storage of 

shellstock. 

.1302 PLANT DESIGN, 

SANITATION, AND WET 
STORAGE 
Plant design, sanitation, and 
wet storage shall be approved by 
the division. 

.1303 WET STORAGE WATER 
Water used for wet storage 

shall be approved by the 

division . 



material, and shall be kept 
clean . 

.1307 RECORD KEEPING 

Records of all shellstock held 
in wet storage shall be kept as 
required by the division. 



SUBCHAPTER 10C - SOLID WASTE AND 
VECTOR CONTROL 

SECTION .0500 STANDARDS FOR 

SPECIAL TAX TREATMENT OF 

RECYCLING AND RESOURCE 

RECOVERY EQUIPMENT 

AND FACILITIES 

.0509 APPEALS (REPEALED) 

.0514 APPEALS PROCEDURE 

Appeals concerning the 
interpretation and enforcement 
of the rules in this Section 
shall be made in accordance with 
G.S. 150B and 10 NCAC IB. 

SECTION .0700 ANNUAL FEES FOR 
HANDLES OF HAZARDOUS WASTE 

.0703 APPEALS (REPEALED) 

.0705 APPEALS PROCEDURE 

Appeals concerning the 
interpretation and enforcement 
of the rules in this Section 
shall be made in accordance with 
G.S. 150B and 10 NCAC IB. 

SUBCHAPTER 10D -WATER SUPPLIES 

SECTION .0800 - LOCATION OF 
SOURCES OF PUBLIC WATER 
SUPPLIES 

.0801 SURFACE SUPPLIES FOR 
COMMUNITY WATER SYSTEMS 

(e) The water source shall 
have an A— I WS-I classification 
as established by the 
Environmental Management 
Commission and shall meet the 
quality standards for that 
classification . 



.1304 SHELLSTOCK CLEANING 
Shellstock shall be thouroughly 
washed with water from an 
approved source and culled to 
remove dead, broken, or cracked 
shellstock prior to wet storage 
in tanks. 

.1305 WET STORAGE TANKS 
Wet storage tanks shall be 
constructed of smooth, 
impervious materials approved by 
the division and shall be kept 
clean . 

.1306 SHELLSTOCK CONTAINERS 
All containers used during wet 
storage shall be constructed of 
non-absorbant and rust-proof 



.0802 REMOVAL OF DISSOLVED 
MATTER AND SUSPENDED MATTER 

Any surface water which 
is to receive treatment for 
removal of dissolved matter and 
or suspended matter in order to 
be used for a community water 
system shall be obtained from a 
source which meets the A^i wr 
A-H WS-I, WS-II or WS-III 
stream classification standards 
established by the Environmental 
Management Commission and shall 
be properly protected from 
objectionable sources of 
pollution as determined by a 
sanitary survey of the watershed 
made by an authorized 
representative of the 



460 



NORTH CAROLINA REGISTER 



department. The source supply 
shall be sufficient in capacity 
to satisfy the anticipated needs 
of the users for the period of 
design . 

SECTION .1100 - OPERATION OF 
PUBLIC WATER SUPPLIES 

.1102 OPERATION OF FILTERED 
COMMUNITY WATER SYSTEMS 

(a) Operator in Charge. 
The person in responsible charge 
of operation of a community 
water system filtration plant 
where raw water is obtained from 
a class A— 1 or A-rf WS-I, WS-II 
or WS-III stream as classified 
by the division of environmental 
management and removal of 
dissolved matter or suspended 
matter is required shall hold an 
appropriate valid certificate 
issued by the North Carolina 
Drinking Water Treatment 
Facility Operators Certification 
Board . 

SECTION .1200 - PROTECTION OF 
UNFILTERED PUBLIC WATER 
SUPPLIES 

.1209 AQUATIC WEED CONTROL 
The rule governing aquatic 
weed control in Rule .1313 shall 
also apply to this Section. 

SECTION .1300 - PROTECTION OF 
FILTERED WATER SUPPLIES 

.1306 UNTREATED DOMESTIC 
SEWAGE OR INDUSTRIAL WASTES 

No un t reat e d domes t ic s ewa ge 
or indust r ial was t es or 
by products s hall bo dischar g ed 
in t o any p ubli c wa t e r supply 
reservoir or str e am classifi e d 
as A II . No hazard o u s was te or 
indus t rial by p r o du ct s shall be 
s tore d im -the wa t e r sh e d of art 
A — H struam unless precau t ions 
are t aken "bo preven t its being 
spilled in t o or o t herwise 
e n ter in g "the raw wa te r sup p ly . 
No was te wa ter t r e atment p lan t 
effluen t shall bo discharged 
in t o any public water supply 
reservoir or s t rea m classified 
as A II with o u t ap pro val of "the 



liaznrdous 



Divisi o n of 
treated or 



. Services ■ No 
untreated domestic 



sewage , 



treated or untreated 



industrial waste or by-products 
shall be stored on the watershed 
of or discharged into any public 
water supply reservoir or stream 
tributary to that reservoir 



whose 



waters are classified 



WS-I. 



No untreated domestic 



sewage 



industrial 



waste 



by-products shall be discharged 
into any public water supply 
reservoir or stream classified 



by-products , 



waste , 



industrial 



treated 



untreated domestic sewage shall 
be stored in the watershed of a 
Class; I or Class II water supply 
reservoir, without the approval 
of the Division of Health 
Services. No hazardous waste or 
indus trial bv-products shall be 
in the watershed of a 



store d 
Class 



WS-II 



or Class WS-III 



stream unless precautions are 
tak en to prevent its being 



spilled 



into 



otherwise 



as WS-II 



or WS-III 



No 



entering the raw water supply. 
No wastewater treatment plant 
effluent shall be discharged 
into any public water supply 
reservoir or stream classified 
as WS-II or WS-III without the 
approval of the Division of 
Health Services . 

.1312 SEPTIC TANK 

SYSTEMS (REPEALED) 

.1313 AQUATIC WEED CONTROL 

(a) Herbicides for aquatic 
weed control shall not be added 
to bodies of water that serve as 
sources of supply for community 
water systems until a formal 
application has been submitted 
to an written approval is 
granted by the Division of 
Health Services. 

(b) The complete written 
application for approval shall 
be submitted to the division at 
least 60 days prior to the 
intended date of herbicide 
application . 

(c) As a minimum, the 
application shall include the 
following : 

(1) The name, location, 

and owner of the water body 
involved; 

(2) The person or agency 
responsible for the 
application of herbicide; 

(3) Name(s) and license 
number(s) of aquatic 
pesticide applicator ( s ) who 
will perform the 
application; 

(4) An explanation of why 
the treatment is needed; 

(5) The specie(s) of aquatic 
weed to be controlled; 

(6) A description of 
alternative control methods 
considered; 

(7) Detailed description 
of the chosen alternative; 

(8) The generic chemical 
name and brand name with 
attached photo copy of the 
label, summary if 
toxicological data, and use 
restrictions provided by the 
manufacturer of the 
herbicide(s) to be used; 

(9) The dosage (rate) and 



NORTH CAROLINA REGISTER 



461 



method of application 
provided; 

(10) The proposed date (s) of 
application; 

(11) A plan for the 
monitoring of the water 
source before and after 
application; 

(12) Assurance of the 
adequacy and availability of 
an alternate source of 
potable water during any 
waiting period specified for 
use of the proposed 
herbicide which shall 
include the name and 
location of the alternate 
source which source must be 
approved by the division. 

(d) The chemical to be used 
must be one which has been 
approved for use in potable 
water supplies by the United 
States Environmental Protection 
Agency and the Commission for 
Health Services and for which a 
tolerance level has been 
approved by EPA. An analytical 
method which can be performed by 
the Division of Health Services' 
lab must exist. 

.1314 GROUND ABSORPTION 
SEWAGE COLLECTION: TREATMENT 
AND DISPOSAL SYSTEMS 

(a) No facility, including but 
not limited to a residence, 
mobile home, mobile home park, 
multi-unit building or dwelling, 
place of business or place of 
public assembly on a lot located 
on a watershed of a class I or 
class II reservoir or on the 
watershed of the portion of a 
stream classified as WS-I, WS-II 
or WS-III extending from a class 
I reservoir to a downstream 
intake of a water purification 
plant shall use a ground 
absorption sewage disposal 
system unless all of the 
following criteria are met: 

(1) The lot includes at least 
40,000 square feet, except 
as provided in Subparagraphs 
(a)(2) and (a)(3); 

(2) The lot shall include 
enough total area to equal 
an average of 40,000 square 
feet per residential 
dwelling unit for a multiple 
unit residential building or 
mobile home park; 

(3) The lot shall include 
enough total area to equal 
an average of 40.000 square 
feet per each 1250 gallons 
of wastewater generated each 
day for a multiple unit 
place of business or place 
of public assembly. The 
anticipated wastewater 
generated shall be 



determined in accordance 
with 10 NCAC 10A .1949; 

(4) The lot size requirement 
shall be determined by 
excluding streets and public 
utility rights-of-way; and 

(5) All other requirements of 
applicable state and local 
rules and laws have been 
met . 

(b) The Director of the 
Division of Health Services or 
his authorized representative, 
shall have authority, when 
special local factors permit or 
require it in order to protect 
the public health adequately and 
to ensure proper health and 
sanitary conditions, to increase 
the lot size requirements in 
particular cases upon a 
determination based on any of 
the following factors: 

(1) size of the reservoirs; 

(2) quantities and 
characteristics of the 
wastes ; 

(3) type of business, use, 
or activity; 

(4) coverage of lot area 

by structures, parking lots 
and other improvements; and 

(5) type and location of 
the water supply. 

(c) The requirements of 

this Rule do not apply to those 
portions of a water supply 
reservoir watershed which are 
drained by class B or class C 
streams. These requirements 
become effective whenever funds 
have been appropriated either 
for purchase of land or for 
construction of a class I or 
class II reservoir. 



SECTION 



1600 - WATER QUALITY 
STANDARDS 



.1625 INORGANIC CHEMICAL 
SAMPLING AND ANALYSIS 
(a) Analyses for the purpose 
of determining compliance with 
Rule .1616, 

.1619, .1620, and .1621(a) of 
this Section are required as 
follows : 

.1631 REPORTING REQUIREMENTS 
(c) The supplier of water is 
not required to report 
analytical results -in cases 
where a state laboratory 
performs the analysis and 
reports th* r e sul t s to the 
department . When a certified 
laboratory analzses a compliance 
sa mple for a supplier of water 
the certified laboratory shall 
report the results within the 
requir ed periods of (a) and (b) 
t o both the department and to 
the supplier of water or his 
designated representative. The 



462 



NORTH CAROLINA REGISTER 



reports shall be 



form 



acceptable to the department and 
shall contain all essenti al 



information , 



When a certified 



laboratory fails to report a 
compliance sam pie result it 
s hall be the res po nsibility of 

t he si lpplicr of water t o report 

resul ts to t h c d op nrtnent as 

re quired by this R ule. 

SECTION .2600 - LOCAL PLAN 
APPROVAL 

.2603 CERTIFICATION 

The department shall certify 
a local approval program which 
satisfies the requirements of 
G.S. 130A-317(d). The 

requirements of G.S. 
130A-317(dH4) are satisfied 
when a local approval program 
provides by ordinance or local 
law for enforcement provisions 
equivalent to G.S. 130A-18 and 
G.S. 130A-25. The requirements 
of G.S. 130A-317(d)(5) are 
satisfied when a local approval 
program has a minimum staff and 
other resources of: a designer 
wh-o- -rs- a p ro f e ssi o nal e ngine er 
registered in this s t a te and who 
will d e vo t e full time -to local 
appr ov al program d u t ies a 
designer who is a professional 



engineer 


registered in this 


State and 


whose dutv is to 


devote the 


time necessary for an 


effect ive 


local approval 



program ; a technical staff, 
budget, equipment and facilities 
sufficient to support a design 
engineering office; and an 
organizational structure 

sufficient to carry out this 
purpose . 

SUBCHAPTER 10F - HAZARDOUS WASTE 
MANAGEMENT 

.0002 DEFINITIONS 

(a) The definitions contained 
in 45 Fed. Reg. 33,073 to 
33,076 (1980) [to be codified in 
40 CFR 260.10 (Subpart B ) ] ; 45 
Fed. Reg. 33,419 to 33,424 
(1980); (to be codified in 40 
CFR 270.2); and 45 Fed. Reg. 
33,486 (1980) [to be codified in 
40 CFR 124.2] have been adopted 
by reference as amended by 45 
Fed. Reg. 72,028, 76,075. 
76,630, and 86,968 (1980); 46 
Fed. Reg. 2,348 (1981); 47 Fed. 
Reg. 32,349 (1982); 48 Fed. 
Reg. 2,511, and 30,115 (1983); 

49 Fed. Reg. 10,500 (1984); and 

50 Fed. Reg. 661 and 18,374 
(1985); and 51 Fed. Reg. 
10,174, and 16,443, 25,470, and 
25,471 (1986) [to be codified in 
40 CFR 260.10 (Subpart B)], 45 
Fed. Reg. 76,075, 76,630, and 
86,968; 46 Fed. Reg. 2,348 



(1981); 47 Fed. Reg. 4,996 
(1982); and 48 Fed. Reg. 14,230 
to 14,231 (to be codified in 40 
CFR 270.2) . 

.0029 IDENTIFICATION AND 

LISTING OF HAZARDOUS 
WASTES - PART 261 

(a) The general provisions 
contained in 45 Fed. Reg. 33,119 
to 3^.121 (1980) [to be codified 
in 40 CFR 261 . 1 to 261 .6 
(Subpart A)] have been adopted 
by reference as amended by 45 
Fed. Reg. 72, 
76,620, 76,623, 



78, 
56, 
44, 



.531 
588, 

,973 
2.532, 
30,115 
23,287, 
50 Fed 
1 ,999, 
49,202, 
(1985); 
arrd 10, 
(e) 



(1980) 
56,589, 
(1981 ); 
14,293, 
(1983), 



028, 72,037, 
76,624, and 
46 Fed. Reg. 
47,429, 44,972, 



48 Fed. Reg. 

14,294, and 

49 Fed. Reg. 

and 44,980 (1984); and 

Reg. 663, 664, 665, 

14,219, 28,743, 28,744, 

49,203, and 33,542, 

and 51 Fed. Reg. 10,174, 



175, and 25,472 (1986). 
The "Lists of Hazardous 
Wastes" and the accompanying 
appendices (I through VIII) 
contained in 45 Fed. Reg. 
33,122 to 33,137 (1980) [ to be 
codified in 40 CFR 261.30 to 
261 .33 (Subpart D)] 
bv reference 
F'ed . Reg . 

74,890, 
(1980); 



have been 

as amended 

72,032 to 

74,892, and 

46 Fed. Reg. 



adopted 
by 45 
72,304, 
74,894 

78,529, 78,537 to 78,544, 
4,614, to 4,620 (1981); 49 Fed. 
Reg. 5,312, 19,923 (1984); and 
50 Fed. Reg. 662, 665, and 
2.000 and 28,744 (1985). 
Supplemental material contained 
in 45 Fed. Reg. 47,833, and 
47,834 (1980); 46 Fed. Reg. 
35,247 to 35,249 (1981); and 48 
Fed. Reg. 14,294, and 15,256 to 
15,258 (1983) have also been 
adopted by reference as amended 
by 50 Fed. Reg. 1999, 2001, 
2002, and 2003, 14,219, 42,942, 
and 42, 943, and 53,319 (1985); 
and 51 Fed. Reg. 2,702, 6,541, 
6,542, 5,330, ami 10,175, and 
19,322 (1986) . 

.0030 STANDARD FOR HAZARDOUS 
WASTE GENERATORS - PART 262 
(c) "Prc-Transport 
Requirements" contained in 45 
Fed. Reg. 33,143, and 33,144 
(1980) [to be codified in 40 CFR 
262.30 to 262.34 (Subpart O] 
have been adopted by reference 
as amended by 45 Fed. Reg. 
76.626 (1980); 47 Fed. Reg. 
1 ,251 (1982); 48 Fed. Reg. 
14,294 (1983); and 49 Fed. Reg. 
49,571 and 49,572 (1984); and 51 
Fed. Reg. 10,175, and 10,176 and 
25,472 (1986) . 

.0032 STANDARDS FOR OWNERS/ 



463 



NORTH CAROLINA REGISTER 



OPERATORS OF HWMF's - PART 264 

(c) "General Facility 

Standards" contained in 45 Fed. 

Reg. 33,222 to 33,224 (1980) [to 

be codified in 40 CFR 264.10 to 

264.18 (Subpart E)]have been 

adopted by reference as amended 

by 46 Fed. Reg. 2,848, 2,849, 

2,874, and 7,678 (1981); 47 Fed. 

Reg. 32,349 and 32,350 (1982); 

48 Fed. Reg. 14,294 (1983); 50 

Fed. Reg. 18,374 and 28,746 

(1985); and 51 Fed. Reg. 25,472 

(1986). 

(f) The provisions for 

"Manifest System, 

Recordkeeping, and Reporting" 

and accompanying appendices 

contained in 45 Fed. Reg. 

33,226 to 33,232 (1980) [to be 

codified in 40 CFR 264.70 to 

264.78 (Subpart E)] have been 

adopted by reference as amended 

by 45 Fed. Reg. 86,970 and 

86,974 (1980); 46 Fed. Reg. 

2,849 and 7,678 (1981); 47 Fed. 

Reg. 32,350 (1982); 48 Fed. 

Reg. 3,982 (1983); 50 Fed. Reg. 

18,374 and 28,746 (1985); and 

51 Fed. Reg. 25,472 (1986). 

(h) The provisions for 

"Closure and Post-Closure" 

contained in 46 Fed. Reg. 2,849 

to 2,851, and 7,678 (1981) [to 

be codified in 40 CFR 264.110 to 

264.120 (Subpart G)] have been 

adopted by reference as amended 

by 47 Fed. Reg. 32,356, 32,357 

(1982); as amended by 48 Fed. 

Reg. 14,294 (1983); and 51 Fed. 

Reg. 16,444 to 16,447, 25,472 , 

(1986); except that 40 CFR 

264.120(b) is rewritten as 

follows: "If at any time the 

owner or operator or any 

subsequent owner of the land 

upon which a hazardous waste 

facility was located removes the 

waste and waste residues, the 

liner, if any, and all 

contaminated underlying and 

surrounding soil, he may add a 

notation on the deed to the 

facility property or other 

instrument normally examined 

during title search, indicating 

the removal of the waste." 

(i) "Financial Requirements" 
contained in 46 Fed. Reg. 2,851 
to 2,866 and 7,678 (1981) [ to 
be codified in 40 CFR 264.140 to 
264.151 (Subpart H)] have been 
adopted by reference as amended 
by 47 Fed. Reg. 15,047 to 15,064 
and 16,554 to 16,558, and 32,357 
(1982) and 48 Fed. Reg. 30,115 
(1983), and 51 Fed. Reg. 16.447 
to 16, 451, 25,472, (1986), 
that 



except 



40 



CFR 
26471437a) (3 )TTa) (4), (aU5)T 
(a)(6), 40 CFR 2 64 . 145(a)(3) , 
(a )(4), a(5), (a)(6). 40 CFR 



264.147(a), 40 
and 40 CFR 



CFR 264.147(b), 
264. 151 (a)(1), 



Section 15, are not adopted by 
reference . 

(1) The following shall be 



substituted 



for 



the 



provision s 



of 



40 



CFR 



264.143(a)(3) which were not 
a dopted by reference: 
"The owner or operator must 
deposit the full amount of 
the closure cost estimate at 



the 



t ime 



the 



fund 



established. Within 1 year 
of the effective date of 
these regulations, an owner 
or operator using a closure 
trust fund established prior 
to the effective date of 

these regulations shall 

deposit an amount into the 
fund so that its value after 
this deposit at least eguals 
the amount of the current 
c losure cost estimate, or 
shall obtain other financial 
assurance as specified in 



this section . " 
(2) The following shall be 



substituted 



for 



the 



p rovisions 



of 



40 



CFR 



264.43(a)(4) which were not 
a dopted by reference: 
"Deleted" 
(3) The following shall be 



substituted 



for 



the 



provisions 



of 



40 



CFR 



264.143(a)(5) which were not 
a dopted by reference : 
"Deleted" 
(4) The following shall be 



substituted 



for 



the 



provisions 



of 



40 



CFR 



264.143(a)(6) which were not 
a dopted by reference : 
"After the trust fund is 
established, whenever the 



current 



closure 



cost 



estimate changes, the owner 
or operator must compare the 

n ew estimate with the 

trustee's most recent annual 
valuation of the trust fund . 
If the value of the fund is 
less than the amount of the 
new estimate, the owner or 
operator within 60 days 
after the change in the cost 

estimate, must either 

deposit an amount into the 
fund so that its value after 
this deposit at least equals 
the amount of the current 
closure cost estimate, or 

obtain other financial 

assurance as specified in 
this section to cover the 
difference . " 
(5) The following shall be 
for 



substituted 



the 



provi sions 



of 



40 



CFR 



264 . 1 4 5 ( a ) (3) which were not 
a do pted by reference : 
"The owner or operator must 
d eposit the full amount of 
the post-closure cost 



464 



NORTH CAROLINA REGISTER 



estimate at the time the 



fund is established, 



Within 



the Grantor. the date of 



1 year of the effective date 
of these regulations, an 
ovmer or operator using 



payment , 



the 



amount 



of 



post-closure 



trust 



fund 



established prior to the 



effective date of 



these 



regulations shall deposit a n 
amount into the fvind so that 
its value after this deposit 
at least equals the amount 
of the current post-closure 



cost 



estimate , 



shall 



obtain 



other 



financial 



assurance as specified in 
this sect ion . " 
(6) The following shall be 



payment , and the current 
value of the trust fund." 

(10) Section 264. 141 is 
amended by adding a new 
p aragraph Ch) to read as 
follows : 

"(h) "Branch" means the 
Solid a n d Hazardous Waste 
Management Branch of the 
North Carolina Department of 
Human Resources . " 

(11) The following shall be 
for the 



subst ituted 



provision s 



of 



40 



CFR 



substituted 



for 



the 



provisions 



of 



40 



CFR 



264.147(a), which was not 
a dopted by reference : 
"Section 264.147 Liability 
requirements . 



264.145(a)(4) which were not 
a dopted by referrence: 
"Deleted" 
(7) The following shall be 



(a) C o verage for sudden 
a cci den tal oc currences . 



An 



subst ituted 



for 



owner or operator of a hazardous 
waste treatment, storage, or 



provisions 



of 



40 



the disposal facility, or a group of 



CFR 



264 . 145(a) (5)which were not 
adopted by reference: 
"Deleted" 
(8) The following shall be 



such 



f acil it ies , 



must 



demonstrate 



financial 



responsibility for bodily injury 
and property damage to third 



substituted 



for 



the 



parties 



caused 



_bv_ 



sudden 



provisions 



of 



40 



CFR 



264.145(a)(6) which were not 

adopted by reference: 

"Afte r the t r u s t fund i s 



established , 



whenever 



current post-closure cost 
estimate changes during the 
operat ing 1 if e of the 



facility , 



the 



operator must compare the defense costs . 



estimate 



with 



a ccidental occurrences arising 
from operations of the facility 

or group of facilities. The 

owner or operator must have and 
maintain liability coverage for 
sudden accidental occurrences in 
the amount of a least $1 million 
per occurrence with an annual 
a ggregate of at least $2 
or million, exclusive of legal 

This liability 



the 



the 



trustee's most recent annual 
valuation of the trust fund. 
If the value of the fund is 
less than the amount of the 
new estimate, the owner or 
operator. within 60 days 
after the change in the cost 



coverage may be demonstrated as 
spe cified in paragraphs (a)(1), 
(a)(2), (a)(3). (a)(4) , (a)(5), 
and (a)(6) of this section: 

(1) An ovmer of operator may 



demonstrate 



the 



required 



liability coverage by having 



estimate , 



must 



either 



liability 



insurance 



deposit an amount into the 
fund so that its value after 
this deposit at least eq u als 
the amount of the current 
post-closure cost estimate, 
or obtain other financial 
assurance as specified in 
this section to cover the 
difference . " 
(9) The following shall be 



specified in this paragraph. 
( i ) Each insurance 

policy must be amended 
by att ach ment of the 
Haz a rdous Waste Facility 
Liability Endorsement or 



evidenced 



J2V_ 



substituted 



for 



the 



provisions 



of 



40 



CFR 



Certificate of Liability 
Insurance. The wording 
of the endorsement must 
be identical to the 
wording specified in 



264 . 151 (a)(1), Section 15, 
which were not adopted by 



Section 264.151 (i) 



The 



wording 



of 



the 



reference 
"Sect ion 



15, 



Not ice of 



Payment. The trustee shall 
notify the EPA Regional 
Administrator of payment to 
the trust fund, by certified 
mail with ten (10) days 
following said payment to 
the trust fund. The notice 
shall contain the name of 



certificate of insurance 
must be indentical to 
the wording specified i n 
Section 264. 151 ( i ) . The 
ovmer or operator must 

submit a signed 

duplicate original of 
the endorsement or the 
certificate of insurance 

to the Branch. If 

requested by the Branch, 



NORTH CAROLINA REGISTER 



465 



the owner or operator 
must provide a signed 
duplicate original of 
the insurance policy. 
An owner or operator of 
a new facility must 



submit 



the 



signed 



duplicate original of 



the 



Hazardous 



Waste 



Facility 



Endorsement 



Liabil ity 



the 



C ertificate of Liability 
Insurance to the Br a nch 
at least 60 days hefore 

the date on w hich 

hazardous waste is first 
received for treatment, 
storage, or disposal. 
The insurance must be 
effective before this 



initial 



receipt 



of 



(2) 



hazardous waste, 
(ii) Each insurance 

policy must be issued by 
an insurer w h ich, at a 
minimum, is licensed to 
transact the business of 
insurance, or eligible 
to provide insurance as 
an excess or surplus 
lines i n surer, in one or 
more States . 
An owner or operator may 



meet the requirements of 
this section by passing 



financial test or 



corporate 



liability 



guarantee 



■ ing the 



for 



cove rage 



as 



speci fi ed in paragra phs (f) 

and ( h ) o f t his section . 

fund . 

owner 



(3) Lia bil ity tru st 
An 



(i) 



may 



or o perator 
demonstrate the 



required 



1 iabil ity 



coverage by establishing 

a sudden a ccidental 

occurrences liahil it y 

trust fun d wh jc h 



conforms 



to 



the 



requirements 



of 



this 



paragraph 



and 



_by 



submitting an originally 
signed duplicate of the 
trust agreem e nt to the 
Branch at lea st 60 days 
before the date of whic h 

h azardous w aste i s fir st 

received for treatment, 



s torm 
The tru : 
entity 



;tee 
which 



authority to act 
trustee and whose 



di s pos al . 
mu st be a n 
has the 



-trust 
ope rations are regulate d 

and examined b_y a 

F ederal or S ta tc a g ency . 
( ii ) The wordi ng of th e 
t rust agreement must be 
iden ti cal to the wording 
sp ecified in Sect ion 



264. 151 (k)(1 ) 



and the 



trust agreement must be 
accompanied by a formal 



certification 



of 



acknowledgement 



example , 



[for 



Dection 



264. 151 (k)(2)] . 
(iii) On the date of the 
initial establishment of 
the sudden accidental 

occurrences liability 

trust fund, the value of 
the fund shall be at 



least 



two 



mill ion 



dollars ($2,000,000), or 
such other amount as 
required by the Branch 



to 



Section 



264.147(c) or (d). 
( iv ) if an owner or 

operator subst itutes 



other 



financial 



assurance as specified 
in this section for all 
or part of the sudden 

accidental occurences 

liability trust fund, he 
may sumhit a written 
request to the Branch 
for release of the 
amount in the trust fund 
in excess of the amount 
of the required coverage 
to be demonstrated by 
the sudden accidental 
occurrences 



liability 



trust fund . 
(v) Any person who 

obtains final judgment 



or 
the 



settlement against 
own er or operator 



fo r bo d ily injury a nd/or 
prope rhy damage c au s c d 
by a sudden acc idental 

occu r rence or 

occurrences arising from 
the operation of the 
facility may request 
payment from the sudden 
accid en tal occurrences 
liability trust fund in 



sat isf act ion 



of 



the 



judgment or settlement 

by submitting to the 

Trustee : 

a. In the case where 
a person has obtained 

a fi n al judgment , a 

certified copy of the 



judgment 



and 



s tatement, s ig ned by 



the 



claimant ' : 



a ttorney of record, 
th at the judg me nt wa s 
eithe r ( 1 ) rendered by 

t he highest court in 

th e .j ti r J. sdiction wher e 
th e action was brought 
an d the owner or 
ope rator exhausted all 
ri g hts of appeal, or 
( 2 ) rendered by the 
highest court which 
rendered a judgment 
and no appeal was made 

by the owner or 

operator to a higher 
court within the time 



466 



NORTH CAROLINA REGISTER 



allowed 
statute 



by applicable 
or rule, or 



(3) agreed to by the 
owner or operator; or 
b. In the case of a 

an 



settlement , 
originally 



sinned 



duplicate 



of the 



settlement 
and an 



agreement 
originally 



signed duplicate of 
t he release of all 
claims ■ 

(vi) After receiving the 
material described i n 
Section 264 . 1 47 (a ) (3 ) ( v ) 
above, the Trustee shall 
pay to the person who 
obtn j ncd the judqm ent o r 
settle ment s u ch a moun t 
of the ju d gment or 
settlement, but not to 
e xceed the amount of the 
funds in the trust . 

(vii) No trust shall be 
terminated without prior 
written consent of the 
Branch . The Branch may 
agree to termination of 
the trust when it has 



determined 



that 



the 



owner or operator has 

substituted alternate 

financial assurance as 



specified 



this 



section, or 



when 



it 



approves 



the 



(12) 



certification of closure 

of the facility 

submitted pu rsua nt to 
Section 264.115." 
Section 264.147(a) is 



amended by adding 
paragraph (4) to read as 



follows ; 



"(4) Surety bond 



guaranteeing payment into a 



sudden 



accidental 



occurrences liability trust 



fund . 
(i) 



An owner or operator 



may 



demonstrate 



the 



required coverag e 



by 



obtaining a surety bond 
which conforms to the 
requirements of this 



paragraph 



and 



by 



submitting the surety 
bond to the Branch. An 
owner or operator of a 
new facility must submit 
bond to the Branch 
east 60 days before 
date on which 



the 



at 1 



the 



hazardous waste is first 
received for treatment, 
storage, or disposal. 

The bond must be 

effective before this 



initial 



receipt 



of 



hazardous waste . 



The 



surety company issuing 
the bond must , at 
minimum. 



be among those 



listed as acceptable 



sureties 



Federal 



bonds in Circular 570 of 
the U. S. Department of 
Treasury . 

(ii) The wording of 

the surety bond must be 

idont ical to the 

wording specified in 
Section 264. 151(1). 

(iii) The owner or 

operator who uses a 
surety bond to satisfy 

the requirements of 

Section 264.147(a) shall 
also estahlish a standby 
trust fund. Under th e 
terms of the surety 
bond, all payments made 
the rounder shall, i n 



accordance 



with 



in struct ion s 
Branch 



from the 
be deposited by 
the surety directly into 
the standby trust fund. 
This standby trust shall 
meet the requirements in 
Section 264.147(a)(3), 
except that : 
a. An originally signed 
duplicate of the trust 
agreement shall be 



submitted 



to 



the 



Branch with the surety 
bond; and 
b. Until the standby 

trust fund is funded 
to the 



purs ua nt 
requ i rements 



of 



Sect ion 


264. 147 


(a)(4)(viii) 


the 


following 


are not 



req uired : 



(i) 



payment into the trust 
fun d as specified in 



Sect ion 



264 .147(a) 



(3) (iii); (ii) annual 
valuations as required 
by the trust a g reement 

[see 264. 151 (k)(1 ) 

Section 10]; and (iii) 
notices of nonpayment 
as required by the 
trus t agreement [see 
264.151 (k)(1 ) Section 
153 . 
( iv ) The bond shall 

guarantee that the owner 
or operator shall : 
a. Fund the standby 

trust fund in an 
a mount egual to eithe r 
the sum of the 



judgment or settlement 
d escribed in Section 
264. 147(a)(4)(vii) and 
the costs of 



ad ministering 



said 



fun d, or the amount of 
the penal sum , 



whichever 



is less, 



within fifteen (15) 
days after the Branch 

or a court of 

competent jurisdiction 



NORTH CAROLINA REGISTER 



467 



issues an order to 
t hat effect; or 
b. Provide alternate 

financial assurance as 

specified in this 

section; and o b tain 
the branch's written 

approval o f the 

assurance provid ed , 

within ninety (90 ) 
days after rec ei pt b y 
both the owner or 
operator and by th e 
Branch of a notice of 
cancellation of the 
surety bond from the 
surety . 
(v) Under the terms of 
the bond, the surety 
shall become liable on 
the bond obligation when 
the owner or operator 
does not perform as 
guaranteed by the bond . 
(vi) The penal sum of 
the bond shall he at 



least 



two 



million 



dollars ($2,000,000), or 
such other amount as 
required by the Branch 



purs uant 



to Section 



2 64.147(c) or (d) 
( vi i> If nn o wner o r 



op erator 



other 



;ub st itutes 
financial 



assurance as specified 
in this section for all 
or part of the surety 
bond, he may submit a 
written request to the 
Branch for release of 
the amount of the penal 
sum of the bond in 
excess of the amount of 
the required coverage to 
be demonstrated by the 
surety bond, 
(viii) Any person who 

obtains final judgment 
or settlement against 
the owner or operator 
for bodily injury a nd/or 
property damage caused 
by a sudden accidental 

occurrence or 

occurrences arising from 
t he operation of the 
facility may reques t 
payment from the surety 
bond in satisfaction of 

the judgment or 

settlement by submitting 

to the Trustee ; 

a. In the case where 

a person has obtained 
a fi n al judgment, a 
certified copy of the 



judgment 



and 



statement signed by 



the 



claimant ' s 



attorney of record 
that the judgment was 
either ( 1 ) rendered b y 
the highest court in 



the jurisdiction where 
the action was brought 
and the owner or 



operator 



exhausted 



all rights of appeal, 
or (2) rendered by th e 
highest court which 



rendered 



ju dgment 



and no appeal was made 
by the owne r or 



operator to 
court 



a hig her 



within the ti me 
allowed by ap p licable 
statute or rule, or 
(3) agreed to by the 
owner or operator; or 
b . In the case of 

a settlement , an 



originally 



signed 



duplicate 



of 



the 



settlement agreement 



and 



an originally 



signed duplicate of 

the release of all 

claims . 

(ix) After receiving the 

m aterial described in 

Section 264.147(a)(4) 



(viii) 



a bove , 



the 



Trustee shall notify the 
Branch of the amount of 
such judgment or 



settlement 



The Branch 



shall then instruct the 
owner or operator to pay 
to the trustee such 
a mounts, not to exceed 



the 



amount 



of 



the 



judgment or settlement, 



and 



the 



costs 



of 



administering said fund, 
or the amount of the 

required coverage , 

whichever is less. If 

the owner or operator 
fails to perform as 
required by the Branch's 
instructions, the Branch 

shall instruct the 

surety to place funds in 
the amount guaranteed 
for the f acil ity( ies ) 
i nto the standby trust 
fund. The trustee shall 
pay to the person who 
obtained the judgment or 
settlement such amount 
of the judgment or 
settlement, but not to 
exceed the amount of the 
funds in the trust . 
(x) Under the terms of 
the bond, the surety may 
cancel the bond by 
sending written notice 

of cancellation by 

certified mail to the 
owner or operator and to 
the Branch. Cancellation 
may not take effect, 
however, until at least 
one hundred twenv (120) 
days after the date of 
receipt of the notice of 



468 



NORTH CAROLINA REGISTER 



cancellation by both the 
owner or operator and 
the Branch, as shown by 

the latter return 

receipt . 
(xi) No bond shall be 

cancelled without prior 
written consent of the 
Branch . The Branch may 
a gree to cancel l ation of 
the bond when it has 



determined 



that 



the 



owner or operator has 

substituted alternate 

financial assurance as 



specified 



m 



this 



sect ion , 



or when it 



approves 



the 



(13) 



is 



certification of closure 

of the f acil itv 

submitted pursuant to 
Section 264, 115." 
Section 264 .147(a) 
amended by adding a new 



paragraph (5) to read 



f ollows 1 



"(5) 



Letter 



as 
of 



credit . 

(i) An owner or operator 
may d emonstrate the 



required 



coverage 



by 



obtaining an irrevoca b le 
letter of cre d it which 
conforms to the 



requirem e nts 
pn rag ranh 



of 



and 



this 
_b_Y 



submitting the letter to 
the Branch. An owner or 

operator of a new 

facility must submit the 
letter of credit to the 
Branch at least 60 days 
before the date on which 
hazardous waste is first 
received for treatment, 
storage, or disposal. 
The letter of credit 
must be effective before 
this initial receipt of 



hazardous waste 



The 



issuing 



institution 



shall be an entity which 
has the authority to 
issue letters of credi t 
and whose letter o f 
credit operations are 
regulated and examined 
by a Federal or State 
agency . 
Cii) The Hording of the 
letter of credit shall 
be identical to the 



wording 



specified 



Section 264. 151 (m) . 
(iii) An owner or 

operator who uses a 



letter 



of credit 



to 



satisfy the requirements 
of this section shall 
also establish a standby 



trust fund , 



Under the 



terms of the letter of 
credit, all payments 
made thereunder shall , 



accordance 



with 



instructions from the 
Branch, be deposited by 
the issuing institution 



directly 



into 



the 



standby 



trust 



fund . 



This standby trust fund 



shall 



meet 



the 



requirements in Section 



264. 147(a)(3), 



that ; 
a. An originally 
sig ned duplicate 



except 



of 



the 



trust agreement 



sh allb e submitted to 
the Branch with the 
letter of credit; and 
. Until the standby 
tru st fund is funde d 



pursuant 



to 



the 



requirements 



of 



Section 



264. 147(a) 



(5)(ix), the following 
are not required: (1) 
payment into the trust 
fund as specified in 
Sect ion 

264. 147(a)(3)(iii) ; 
(ii) annual valuations 
a s required by the 
trust agreement [see 
Section 
not ices 



2 64. 151 (k)(1 ) 
10 ]; a n d (iii) 

of no npayment a^ 

re qui red by the tru s t 

agreement 

2~ 64.~1bV(k)(1 ), 



[ see 



Section 



15] 

( iv ) The letter of credit 
shall be accompanied by 
a letter from the owner 
or opertor which shall 
state | 

a. The letter of credit 
nu mber ; 

b . The name of the 
issuing institution; 

c. The date of issuance 



of 



the 



letter 



of 



credit ; 
. The EPA 



identification 




number ( s ) of 


the 


f ac il itv( ies ) ; 




e. The name(s) and 




address ( es ) of 


the 



f acility( ies ) ; and 
f . The amount of 

funds assured by the 
letter of credit. 
(v) The letter of credit 
sha ll be irrevocable and 
shall be issued for a 
period of at least one 
year unless at least one 
hundred twenty (120) 
days before the current 
expiration date, the 

issu in g institution 

notifies both the owner 
or operator and the 
Bra n ch by certified mail 
of a decision not to 
extend the expiration 



NORTH CAROLINA REGISTER 



469 



date ■ Under the terms 

of the letter of 

credit, the one hundred 
and twenty (120) days 
will begin on the date 
when both the owner or 
operator and the Branch 

have received the 

notice, as shown by the 
latter return receipt . 
(vi) The letter of credit 
shall be issued in an 



amount 



at 



least two 



million 



dollars 



($2,000,000), or such 
other amount as required 
by the Branch pursuant 
to Section 264.147(c) or 
(d). 



(vii) If an owner or 

operator subst itutes 



other 



financial 



assurance as specified 
in this section for al l 
or part of the amount of 
the letter of credit, he 



may submit 



w r itte n 



request to the Branch 



for 



release 



of the 



amount of the letter of 
credit in excess of the 
amount of required 



coverage 



to 



be 



demonstrated 



by 



the 



letter of credit. 
(viii) Any person who 

obtains final judgment 
or settlement against 
the owner or operator 
for bodily injury and/or 
property damage caused 
by a sudden accidental 

occurrence or 

occurrences arising from 
the operation of the 
facility may request 
payment from the letter 
of credit in 



satisfaction 



of 



the 



judgment or settlement 
by submitting to the 
Trustee : 
a. In th e 
person 



ca s e where 
has obtained 



final 



judgment , 



certified copy of the 



judgment 



and 



statement, signed by the 
claimant's attorney of 
record that the judgment 
was either ( 1 ) rendered 
by the highest court in 
the jurisdiction where 
the action was brought 



and 



the 



operator exhausted all 
rights of appeal, or (2) 
rendered by the highest 
court which rendered a 
judgment and no ap peal 
was made by the owner or 
operator to a higher 
court within the ti me 
allowed by applicable 



statute or rule, or (3) 
agreed to by the owner 



or operator; or 
b. In the case 



of 



settlement , 



originally 



duplicate 



of 



signed 



the 



settlement agreement and 
an originally signed 
duplicate of the release 
of all claims . 
( ix ) After receiving the 
material described in 



Section 



264.147(a) 



( 5 ) (viii) above , 



the 



Trustee shall notify the 
Branch of the amount of 

such judgment or 

settlement . The Brancli 
shall then instruct the 
institution issuing the 
letter of credit to pay 



to the Trustee 



such 



a mounts, not to exceed 



the 



amount 



of 



the 



judgment or settlement, 



and 



the 



costs 



of 



administering said fund, 
or the amount of the 
required 



coverage , 



whichever is less. 



The 



Trustee shall pay to the 
person who obtained the 
judgment or settlement 
such amount of the 
judgment or settlement, 
but not to exceed the 



amount 
trust . 



of funds in the 



(x) If the owner or 
operator does 



not 



establish 



alternate 



financial assurance as 
required by this section 
and does not obtain 
written approval from 
the Branch of any such 

alternate financial 

assurance within ninety 
(90) days of receipt by 



both 



the 



operator and by 



the 



Branch of a notice that 
the issuing institution 

will not extend the 

letter of credit beyond 
the current expiration 
date, the Branch shall 
draw on the letter of 
credit. The Branch may 
delay drawing on the 
letter of credit if the 
issuing 



institution 



grants an extension of 
the term of the letter 
of credit. During the 
last thirty (30) days of 
any such extension, the 
Branch shall draw on the 
letter of credit if t he 
owner or operator has 



failed 



to 



alternate 



provid e 



financial 



assurance as specified 



470 



NORTH CAROLINA REGISTER 



in this section or has 
failed to obtain written 
ap prova 1 by the Branch 
o f su c h as su rancc . 
( x i ) No letter of credit 

s h a 11 be termi n a ted 

wit h out prior writte n 
consent of the Branch. 
The Branch may return 
the letter of credit to 
the issuing institution 
for termination when the 
Branch has determined 

that the owner or 

operator has substitute d 

alternate financial 

assurance as specified 
in this section, or when 

it a pproves the 

certification of closure 

of the f ac ility 

submitted pursuant to 
Section 264. 115. 
(14) Section 264.147(a) is 

amended by adding a new 
paragraph (6) to read as 



follows : 



"(6) 



Use 



of 



multiple 



financial 



mechanisms . 



An 



owner 



or 



operator may demonstrate the 
required liability coverage 
by establishing more than 
one financial mechanism as 
specified in this section. 
These mechanisms are limited 
to trust funds, surety bonds 
guaranteeing payment into a 

trust fund, letters of 

credit, and insurance. The 

mechanisms mus t be as 

specified in para g raphs (1), 
(3), (4), and (5) of this 
s ection, except that it is 
the combination of the 
mechanisms, rather than the 
single mechanism, which nust 
provide financial assurance 
for an amount at least two 



million 



dollars 



($2,000,000) . 



If an owner 



or operator uses a trust 
fund in combination with a 
surety bond or a letter of 
credit, he may use the trust 
fund as the sta n dby ti'ust 
fund for the other 



mechanisms . 



A 



single 



standby trust fund may be 
established for two or more 
mechanisms . The Branch may 
use any and all of the 
mechanisms to provide for 



sudden 



accidental 



occurrences 



1 iabil ity 



coverage for the facility." 
(15) The following shall 

be substituted for the 



provisions 



of 



40 



CFR 



264.147(b), which was not 
ad opted by reference : 
"(b) Coverage for nonsudden 
accidental occurrences. An 
owner or operator of a 
surface impoundment , 



landfill, or land treatment 
facility wh ic h is used to 
manage hazardous waste, or a 



group 
must 



of 



such fc c i 1 it ier 



d^ mon strate financ ial 
respons ibility for bodily 
inju ry and property damage 
to third parties caused by 



nonsudden 



accidental 



occurrences 



arising 



from 



operations of the facility 
or group of facilities. The 
owner or operator must have 
and maintain liability 



coverage 



for 



nonsudden 



accidental occurrences 



in 



the amount of at least $3 
million per occurrence with 
a n annual aggregate of at 
least $6 million, exclusive 
of legal defense costs. 
Thi s liability coverage may 
be demonstrated as specified 
in 



(b)(2) 



parag raphs 



(b)(1) 



(b)(3) 



(b)(4) 



(b)(5). and (b)(6) of this 
section : 
( 1 ) An owner or operator 

may demonstrate the required 



lia bility coverage by having 

1 iabil ity insurance as 

specified in this paragraph, 
(i) E a ch insurance 

policy must be amended 
by attachment of the 
Hazardous Waste Facility 
Liability Endorsement or 
evidenced by a 



Cert if icate 



Liability 



Insur ance. The wording 
of the endorsement mus t 
be identical to the 
wording specified in 



Section 264. 151 (i) . 
Hordi ng of 



The 
the 



certificate of insurance 
must be identical to the 
wording specified in 
Section 264. 151 (1) . The 
owner or operator must 

submit a signed 

d uplica t e original of 
the endorsement or the 
certificate of insuranc e 

to the Branch. If 

requested by the Branch, 
the owner or operator 
must provide a signed 
duplicate original of 
the insuracne policy. 
An owner or operator of 
a new facility mu st 



submit 



the 



signed 



duplicate original of 



the 



Hazardous 



Waste 



Facil ity 



Endorsement 



Liability 



the 



Certificate of Liability 
Insurance to the Branch 
at least 60 days before 

the date on w hich 

hazardous waste is first 
received for treatment, 
storage, or disposal. 



NORTH CAROLINA REGISTER 



471 



The insurance must be 



effective before 



this 



in it in 1 



receipt 



of 



h azardous waste, 
(ii) Each insurance 

policy must be issued by 
an insurer which, at a 
minimum, is licensed t o 
transact the business of 
insurance, or eligible 
to provide insurance as 
a n excess or surp lus 
lines i nsurer, in one or 
m ore States . 
(2) An owner or operator 

may meet the requirements of 
this section by passing a 
financial test or using th e 



corporate 



liability 



guarantee 



for 



coverage 



(f ) 



specified in paragra phs 

and (h) of this section. 

(3) Liability trust f und . 

(i) An owner or operator 



may 



demonstrate 



the 



required 



liabil ity 



coverage by establishing 
a nonsudden accidental 

occurrences liability 

trust fund which 



conforms 



to 



the 



requirements of thi s 



parag r aph 



and 



J2Y 



submitting an originally 
signed du p licate of the 
trust agreement to the 
Branch at least 60 days 
before the date on w hich 
h azardous waste is first 
received for treatment, 
storage, or dis p osal. 
The trustee must he a n 
entitY which has the 
authority to act as a 
trustee and whoso trust 
operations are regulated 



and 



examined 



by 



Federal or State a ge ncy, 
(ii) The word i ng of the 
trust agreement in u r.t be 
identical to the wording 
specified in Section 
264. 151 (k)(1 ) ■ and the 
trust agreement must be 
accompanied by a formal 



certification 



of 



acknowledgment [ for 



example , 



Sect ion 



264.151 (k)(2)]. 
(iii) On the date of the 
i nitial establishment of 
the nons ud den a ccidon tal 

occurrences 1 ia hil ity 

t rust fund, t he. va luo of 
the fund shall be at 



least 



s IX 



m ill ion 

dol lars ($ 6,000,000), or 

su ch o th er amount a s 

re giij rod by the Branch 

pursuant to Section 

2 64". 1 ' I Vic . ) or (d JK 
( iv j If an owne r or 

operator subr.t itutes 



other 



financial 



assurance as specified 
in this section for all 
or part of the nonsudden 
accidental occurrences 
liability trust fund, he 
may submit a written 



request to the Branch 



for 



release 



of the 



a mount in the trust fund 
in excess of the amount 
of the required cove rage 
t o be d c mons tra ted by 
t he nonsudden accidenta l 
occurrences 



liability 



trust fund, 
(v) Any person who 

obtains final judgment 
or settlement against 
the owner or operator 
for bodily injury and/or 
property damage caused 

by a nonsudden 

accidental occurrence or 
occurrences arising fro m 
the operation of the 
facility may request 



payment 



from 



the 



nonsudden 



accidental 



occurrences liability 

trust fund in 



sat isf act ion 



of 



the 



judgment or settlement 
by submitting to the 
Trustee : 



a . In the case where 

a p erson has obtained 

a fin al judgment, a 

certified copy of the 



.jud gment 



and 



statement , 



the 



sig n ed b y 
claimant ' s 



attorney of record 
th at the judgment was 
either ( 1 ) rendered b y 
the highest court in 
t he jurisdiction where 
the action was brought 



and 



the 



operator exhausted all 
rights of appeal, or 
(2) rendered by the 
highest court whic h 



rendered 



judgment 



a nd no appeal was made 



by 



the 



operator to a higher 
court within the tim e 
allowed by applicable 
statute or rule, or 
(3) agreed to by the 
owner or operator; or 
b . In the case of a 

settlem e nt , an 

signe d 



originally 
dupl icate 



of 



the 



settle ment 
and 



signe d du 
the release 



a greem ent 
orig i nally 
lie n t o o f 
of all 



cla i ms^ 
(vi) A lte r rec eivi ng th e 
m a terial de scrib ed in 
Section 264 , 1 47(b ) ( 3 ) ( v ) 
above, the Trustee shall 



472 



NORTH CAROLINA REGISTER 



pj\ y to the per son w ho 

ohta i ncd the ju dg men t or 

s e ttl e m etvt sj i c h a moil n t 

o 1 th e ju dg ment o r 

se ttl ement , but no t to 

excee d t h e amo u nt o f the 
fun ds in the trust , 
(vii) No trust shall be 
terminated without prior 
written consent of the 
Branch. The Branch may 
agree to term i nation of 



the trust when it 



determined 



that 



has 
the 



owner or operator has 



substituted 



alternate 



financial assurance as 



specified 



section , 



when 



thi s 
it 



approves 



the 



certification of closure 



of 



the 



f acil itv 



submitted pursuant to 
Section 264.115." 
(16) Section 264. 147(b) 

is a ii e nded by adding a new 



paragr a ph (4) to read as 
follows; "(4) Surety bond 
guaran teeing payment into a 

nonsudden a ccidental 

occurrences liability trust 
fund . 

(i) An owner or operator 
may demonstrate the 



required coverage 



bx 



o btaining a surety bond 
which conforms to the 
requirements of thi s 



paragraph 



and 



.by. 



submitting the surety 



bond to the Branch . 



An 



owner or operator of a 
new facility must submi t 
the bond to the Bra nch 
at least 60 days before 



the 



date 



which 



haz a rdous waste is first 
received for treatment, 
storage, or disposal, 



The 



bond 



must 



be 



effective before 



this 



initial 



receipt 



of 



hazardous waste , 



The 



surety company issuing 
the bond must , at a 
minimum, be among thos e 
listed as accepta ble 



sureties 



on 



Federal 



bonds in Circular 570 of 
the U.S. Department of 
Treasury . 
(ii) The wording of the 
surety bond must be 
identical to the wording 



specified 


in 


Section 


264. 151(1). 
(iii) The owner 


or 


operator w 


ho 


uses a 


surety bond 


t 


o satisfy 


the requirements of 


Section 264. 


147(b) shall 


also establish 


a standby 


trust fund. 




Under the 


terms of 


th 


e surety 



h .<? nd , a l l pay ments 



made 

the reu n d c r sha ll, i n 

ace o rein nee w i I h 

i nstruction s from the 

b ran c li he d ono s 3 ted b y_ 

t he s i iretv direct ly in to 

t he standby trust fund . 
This standby trust shall 
meet the require m ents i n 
Section 264.147(b)(3), 
except that ; 

a. An originally signed 
duplicate of the trust 



agreement 



shall 



be 



submitted to the branch 

with the surety bond; 

and 

b. Until 



the standby 



trust fund is funded 



pursuant 



to 



the 



requi rem ents of Section 
264. 147(b) (4) (iv), the 
are not 



following 



req uired: (i) payment 
into the trust fund as 
s pecjfi e d in Sectio n 
264. 147(b)(3)(iii); (ii) 



annual 



valuations 



requi red by the tr ii st 
a <1 re ement [see 264.151 
(k) t 1 ) Section 10] ; and 



(iii) 



notices 



of 



nonpayment as re quired 
by the trust agreement 



[ see 



264.151(k) 



(1 ) 



Sect ion 15]. 
(iv) The bond shall 

gu arantee that the owner 
or operator shall : 
a. Fund the stand by 
trust fund in an amount 
equal to either the sum 
of the judgment or 
settlement described in 



Section 



264. 147(b) 



(4)(vii) and the costs 
o f administering sai d 
fun d, or the amount of 
the penal sum, whichever 
is less, within fifteen 
(15) days after the 



Branch or 



court of 



competent jurisdiction 
issues an order to that 
effect ; or 

b. Provide alternate 
fin nnci al assurance as 



specified 



this 



section, and obtain the 
Branch' s written 



approval 



of 



the 



assurance 



provided, 



within ninety (90) days 
a fter receipt by both 
the owner or operator 
and by the Branch of a 
n otice of cancellation 
of the surety bond from 
the surety. 
(v) Under the terms 

of the bond, the surety 
shall become liable on 
the bond obligation when 
the owner or operator 



NORTH CAROLINA REGISTER 



473 



does not perform as 
guaranteed by the bond. 



(vi) 
the 



The penal sum of 
bond shall be at 



least 



million 



dollars ($6,000,000), or 
such other amount as 
required by the Br a nch 
pu rsuant to Section 
264. 147(c) or (d) . 

(vii) if an owner or 

operator subst itutes 

other f inane ial 

assurance as specified 
in this section for a ll 
or part of the surety 
bond, he may submit a 
written request to the 
Branch for release of 
the amount of the penal 
sum of the bond in 
excess of the amount of 
the required coverage to 
be demonstrated by the 
surety bond . 

(viii) Any person who 

obtains final judgment 
or settlement against 
the owner or operator 
for bodily injury and/or 
property damage caused 

by a nonsudden 

accidental occurren c e or 
o ccurrences arising fr om 
th e operati o n of th e 
facility m a y rog ue st 
pnyment from the surety 
bond in satisfaction of 

the judgment or 

settlement by submitting 
to the Trustee : 
a. In the case where a 
person has obtained a 



final 



judgment , 



certified copy of the 



judgment 



and 



statement, signed by the 
claimant's attorney of 
record that the judgment 
was either ( 1 ) rendered 
by the highest court in 
the jurisdiction where 
the action was brought 



and 



the 



operator exhausted all 
rights of appeal, or (2) 
rendered by t h e h ighest 
court which re nd ered a 

.ju dgm en t a nd no app eal 

was made by the ownor_or 

opern lor to fi h i qlior 

rnui'_t within i lie time 

all owed hy nppJ i cihle 

statute or rule, or (3) 



agreed to bv the 


owner 


or operator; or 




b . in the case 


of a 


settlement , 


an 


originally 


signed 


duplicate of 


the 


settlement agreement and 


an originally 


signed 


duplicate of the release 



of all claims . 



(ix) After receiving the 
material described in 



Section 



264.147(b) 



(4) (viii) 



a bove , 



the 



Trustee shallnorify the 
Branch of the amount of 

such judgment or 

settlement . The Branch 
shall then instruct the 

owner or operator t o 

pay to the trustee such 
amounts, not to exceed 



the 



amount 



of 



the 



judgment or settlement 

and the costs of 

administering said fund, 
or the amount of the 



required 



whichever is less. 



coverage , 



If 



the owner or operator 
fails to perform as 
required by the Branch's 
instructions, the Branch 

shall instruct the 

surety to place funds in 
the amount guaranteed 
for the f acility( ies ) 
into the standby trust 
fund. The trustee shall 
pay to the person who 
obtained the judgment or 
settlement such amount 
of the judgment or 
settlement, but not to 
exc eed the amount of the 

fun ds in t he trust . 

(x) Under the terms 



of the bond, the surety 
may cancel the bond by 
sending written notice 



of 



cancellation 



J3X 



certified mail to the 
owner or operator and to 
the Branch . 



Cancellation 



may 



not 



take effect, however, 

one 



until 



at 



least 



hundred twenty (120) 
days after the date of 
receipt of the notice of 
cancellation bv both the 
owner or operator and 
the Branch, as shown bv 

the latter return 

receipt . 
(xi) No bond shall be 

canc elled without prior 



written 
Branch . 



co nsent of the 
The B ranch may 



aci rcc to cancelin g ion of 

the bon d wh en i t h as 

d et c rmi n e d 1 1 1 a t 1 1 1 e 

own e v or opera l or h a s 

substituted alternate 

financial assurance as 



spec if ied 



in 



this 



section, or 



when 



it 



approves 



the 



(17) 



certification of closure 

of the facility 

submitted pursuant to 
Section 264 .115. 
Section 264. 147(b) 



474 



NORTH CAROLINA REGISTER 



is amended by adding a new 
paragraph (5) to read as 



follows : 



"(5) Letter of 



credit . 

( i ) An owner or 

operator may demonstrate 
the required coverage by 
obtaining an irrevocable 
letter of credit which 
conforms to the 



requirements 



of 



this 



and 



by 



s ubmitting the letter to 
the Branch. An owner or 
oper ator of a n ew 
facility must submit the 
letter of credit to the 
Branch at least 60 days 
before the date on which 
hazardous waste is first 
received for treatment, 
storage, or disposal. 
The letter of credit 
must be effective before 
this in itial receipt of 



hazardous waste 



The 



issu ing 



institut ion 



shall be an entity which 
has the authority to 
issue letters of credit 



and 



whose letter 



of 



credit operations are 
regulated and examined 
by a Federal or State 
Agency . 

(ii) The wording of 

the letter of credit 
shall be identical to 
the wording s p ecified in 
Section 264 . 151 (m) . 

(iii) An owner or 

operator who uses a 
letter of credit to 
satisfy the requirements 
of this section s hall 
also establish a standby 

trust fund . Under the 

terms of the letter of 
credit, all payments 
made thereunder shall 



accordance 



with 



instructions from the 
Branch, be deposited by 
the issuing institution 

directly into the 

standby trust fund . 

This standby trust fund 
shall 



meet 



the 



require m ents in Section 



264. 147(b)(5), 



except 



that 

a. An originally signed 

duplicate of the trust 



agreement 



shall 



be 



sub mitted to the Branch 
with the letter of 
credit ; and 

b . Until the standby 

trust fund is funded 



pursuant 



to 



the 



requirements 



of 



264. 147(b) (5) (ix), the 
following are not 



required 



( 1 ) payment 



into the trust fund as 
specified in Section 
264. 147(b)(3)(iii) ; (ii) 
annual valuations as 
required by the trust 
agreement [ see 



264. 151 (k)(1 ) 



Section 



10]; and (iii) notices 



of 



nonpayment 



required by the trust 

see 



a greem ent 



_L 



264. 151 (k)(1 ) Section 
15] . 
( iv ) The letter o f 

credit shall be 



a ccompanied by a letter 



from 



the 



operator which shall 



state ; 



The letter of credit 



number ; 
L The 



of the 



issu i ng institution; 

c. The date of issuance 

of the letter of credit; 

d, The EPA 

identification number(s) 

of the f acilityt ies ) ; 

e. The name(s) and 



address(es) 



of 



the 



facility ( ies ) ; and 
f. The amount of funds 
assured by the letter of 
credit . 
(v) T h e letter of 

be 



credit 



shall 



irrevoca b le and shall be 
issued for a period of 
at least one year unless 
at least one hundred 
twe nty (120) days before 
the current expiration 
date , the issuing 



institution 



notifies 



the 



or 



both 

operator and the Branch 
by certified mail of a 
decision not to extend 
the expiration date . 
Under the terms of the 
letter of credit, the 
one hundred and twenty 
(120) days will begin on 
the date when both the 
owner or operator and 
the Branch have received 
the notice, as shown by 



the 



latter 



return 



recei pt . 
(vi) The letter of 

credit s h a 11 be issued 



in an amount at least 



million 



dollars 



($6,000,000) 



or such 



other amount as required 
by the Branch pu rsuant 
to Section 264.147(c) or 

(v? i ) If an owner or 

oper ator substitutes 



other 



financial 



a ssu ra nce as specifie d 
in this section for all 
or part of the amount of 



NORTH CAROLINA REGISTER 



475 



the letter of credit, he 
may submit a written 
request to the Branch 



for 



release 



of 



the 



a mount of the letter of 
credit in excess of the 



amount 



of 



coverage 



to 



requir ed 
be 



demonstrated 



_bjL 



the 



letter of credit . 
(viii) Any person who 

obtains final judgment 
or settlement agains t 
the owner or operator 
for bodily injury and/or 
property damage caused 

by a nonsiiridcn 

accidental occurrence or 
occurrences arising from 
the operation of the 
facility may request 
payment from the letter 
of credit in 



satisfaction 



of 



the 



judgment or settlement 
by submitting to the 
Trustee : 

a. In the case where a 
person has obtained a 

final judgment , a 

certified copy of the 

judgment and a 

statement, signed by the 
claimant's attorney of 
record that the judgment 
was either ( 1 ) rendered 
by the highest court in 
the jurisdiction where 
the action was brought 

and the owner or 

operator exhausted all 
rights of appeal, or (2) 
rendered by the highest 
court which rendered a 
judgment and no appeal 
was made by the owner or 
operator to a highter 
court within the time 
allowed by applicable 
statute or rule, or (3) 
agreed to by the owner 
or operator; or 

b . In the case of a 

settlement , an 

originally signed 



duplicate 



of 



the 



setlement agreement and 
an originally signed 
duplicate of the release 
of all claims ■ 
( ix ) After receiving 

the material described 
in Section 



264.147(b)(5)(viii), the 
Trustee shall norifv the 
Branch of the amount of 

such judgment or 

settlement. The Branch 
shall then instruct the 
i nstitution i ssuin g the 
letter of credit to pay 



to the 



Trustee 



such 



a mounts, n o t to exc eed 
the amoun t of the 



judgment or settlement 

and the costs of 

administering said fund, 
or the amount of the 



required 



whichever is lens. 



coverage , 



The 



Trustee shall p a y to the 
person who obta ine d the 
judgment or settlement 
such amount of the 
judgment or settlement, 
but not to exceed the 
a mount of funds 
trust . 



in the 



(x) If the owner or 
operator does 



not 



establish 



alternate 



financial assurance as 
required by this section 
and does not obtain 
written approval from 
the Branch of any such 

alternate financial 

a ssurance within ninety 
(90) days of receipt by 
both the the owner or 
operator and by the 
B ranch of a notice that 
t he issuing institution 



will not 



extend the 



letter of credit beyond 
the current expiration 
date, the Branch shall 
draw on the letter of 



credit 



The Branch may 



delay drawing on the 
letter of credit if the 

issuing institution 

grants an extension of 
the term of the letter 



of credit , 



During the 



last thirty (30) days of 
any such extension, the 
Branch shall draw on the 
letter of credit if the 
owner or operator has 
failed to provide 



alternate 



financial 



assurance as specified 
in this section or has 
failed to obtain written 
a pproval by the Branch 
of such assurance. 
(xi) No letter of credit 



shall 



be 



terminated 



without prior written 
consent of the Branch. 
The Branch may return 
the letter of credit to 
the issuing institution 
for termination when the 
Branch has determined 



that 



the 



operator has substituted 

alternate financial 

assurance as specified 



in this section, 
it approves 



or when 
the 



(18) 



certification of closure 

of the facility 

submitted pursuant to 
Section 264.115. 
Section 264. 147(b) 



476 



NORTH CAROLINA REGISTER 



is amended by adding a new 
p aragr ap h (6) to r en d as 



follows 



"(6) 



Use 



of 



multip le 



financial 



moch-ipi sm s . 

An owner or operator may 

demonstrate the required 



1 iability 



coverage 



by 



establishing more than one 

financial mechanism as 

s pecified in this section. 
These mechanisms are limited 
to trust funds, surety bonds 
guaranteeing payment into a 
trust fund. letters of 
credit ■ and insurance , The 



mechanisms 



must 



be 



specified in paragraphs ( 1 ) 



(3), (4) 



and (5) of this 



section, except that it is 



the 



combinat ion 



of 



the 



mechanisms, rather than the 
single mechanism, which must 
provide financial assurance 
for an amount at least six 
million dollars 



($6.000,000) 



If an 



owner 



or operator uses 



trust 



fund in combination with a 
surety bond or a letter of 
credit, he may use the trust 
fun d as the standby trust 



fund 



for 



the 



other 



mechanisms . 



single 



standby trust fund may be 
estalished for two or more 
mechanisms . The Branch may 
use any and all of the 
mechanisms to provide for 

sudden accidental 

occurrences 



liabil ity 



coverage for the facility. 
(19) Section 264. 147 is 

amended by adding a n< 
paragraph (h) to read as 



follows 



"(h) 



guarantee 



for 



Corporate 



liabil ity 



coverage . 
(1 ) Subject to subparagraph 
(2), an owner or operator 
may meet the requirements of 
this section by obtaining a 
written guarantee hereafter 
referred to as "corporate 
guarantee . " The guarantor 



must 



be 



the 



parent 



corporation of the owner or 



operator as 



defined 



Section 264.140(d ) . 



The 



g uarantor must meet 



the 



requirements for owners or 



operators 



paragraps 



(f)(1) through (7) of thi s 
section. The wording of the 
corporate guarantee must be 
identical to the wording 



specified 



Sect ion 



264. 15(n) 



certified 



copy 



of 



the 



corporate 



guarantee must accompany the 
items sent to the Branch as 



specified 



(f)(3) of this 



paragraph 



Section . 



The 



gua 

( 



terms of the corporate 
r a nt e e must provide that : 
i) If the own e r or 

operator f ails t o 

satjsbv a judgment base d 
on a determination o f 
for 



1 iabil ity 



bodily 



injury and/or property 
damage caused by sudden 
or nonsudden accidental 
occurrences (or both, as 



the 



may 



arising 



from 



be), 



the 



operation of facilities 

covered by. this 

corporate guarantee, or 
fails to pay an amount 
agreed to in settlement 
of claims arising from 
or alleged to rise from 
such in.jury or damage, 
the guarantor will do so 
up to the limits of 
coverage . 
ii) The corporate 
guarantee will remain in 



force 



unless 



the 



guarantor sends notice 



of 



cancellation 



JU£ 



certified mail to the 
owner or operator and to 

the Branch. This 

guarantee may not be 

terminated unless and 



until 



the 



Branch 



approves 



alternate 



1 iabil ity 



coverage 



(2) 



complying with Section 
264. 147 and/or 265. 147. 
A Corporate 
guarantee may be used to 



;at 



isfv the requirements of 
s section if it is a 



thi 

legally 



valid 



and 



enforceable obligation in 
the State 



of 



North 



Carolina . 



(20) 



is 



Section 264 . 1 47 
amended by adding a new 



paragraph (i) to read as 



f ollows : 



(i) Notice of claim. 
The owner or operator of 
each facility shall give 
written notice to the 
Branch of every claim 
for bodily injury and/or 



pro 



by 



perty damage caused 
a sudden and/or 



nonsudden 



occurrence 



ace idental 
or 



occurrences arising from 
the operation of the 

f acil ity( ies ) . The 

ow n er or operator of 
each facility shall give 



such 



not ice 



to 



the 



Branch 



as 



possible 



and 



any 



event no later than 
thirty (30) days after 
learning of such claim. 
The owner or operator of 
each facility shall give 



NORTH CAROLINA REGISTER 



477 



writen notice to the 
branch of every .judgment 
against the owner or 



amended by adding a new 



operator 



for 



bodily 



injury and/or property 



damage caused 



sudden 



J?JL 



or 



nonsudden 



accidental occurrence or 
occurrences arising from 
the operation of the 



f acility( ies ) . 



The 



owner or operator of 
each faci .1 ity shall give 
such notice to the 
Branch as soon as 
possible and in any 



paragraph (k) to 


read 


as 


follows : 

"(k)(1) A trust 


agreement 


for 


a trust 


fund, 


as 


specified in 


Sect 


ions 


264 


147(a)(3) 




or 


264 


147(b)(3) 




or 


265 


147(a)(3) 




or 


265 


147(b)(3) must 


be worded 


as 


follow.-, , except 


that 


instrucions in br 


ickcts 


are 


to 


be replaced 


with 


the 


relevant information and 


the 



event 



later than 



thirv (30) days after 



learning 



of 



said 



judgment . The owner or 



operator 



of 



each 



facility shall submit to 
the branch a copy of 
every judgment against 
the owner or operator 
for bodily injury and/or 
property damage caused 
by a sudden and/or 



brackets deleted: 

TRUST AGREEMENT 
This Trust Agreement, 
hereafter referred to as the 
"Agreement," is entered into as 
of [date] by and between [name 
of the owner or operator], a 

[name of State ] [ insert 

"partnership , " 
"trust , " or 



"corporation," 
"association," 



" individual" ] , 



hereafter 



nonsudden 



accidental 



referred to as the "Grantor," 
and [name of corporate trustee], 
[insert "incorporated in the 



State of 



or 



occurrence 



or 



o ccurren ces ar isi n g fr o m 
th e op erati on of t he 



national 



bank" ] , 



hereafter 



f acil itv( ies ) . 



The 



own er 
each 



facility 



operator of 
shall 



re 1 c r re d to a s t li e "T ru stee . " 
W here a s the S ol i d and 

h n r.ar clous Waste Mana gement 

Branch of the Department of 



submit a copy of such 
judgment to the Branch 
as soon as possible and 



Human 



Resources 



hereafter 



referred to as the "Branch," an 
agency of the State of North 



Carolina, 



has 



established 



in any event no later certain regulations applicable 



than thirty (30) days 
after receiving a copy 
thereof. " 
(21 ) Section 264. 147 

is amended by adding a new 
paragraph ( i ) to read as 



to the Grantor, reguiring that 
the Grantor shall demonstrate 
financial responsibility for 



bodily 



injury and property 



follows j 



" ( j ) 



cont inous 



coverage . 



An 



owner 



or 



operator must continuously 
provide liability coverage 
for a facility as requ ired 
by this section until 



notified that 



he 



longer required to maintain 
liability coverage for that 
facility in acco rd ance with 
Section 264.147(e). If the 
owner or operat o r fail s to 
submit evidence of liability 
coverage a s required by 



damage to third parties caused 
by each sudden accidental 
occurrence and/or each nonsudden 
accidental occurrence arising 
from operation of the facility 
ide ntified in Schedule A; and 

Whereas, the Grantor has 
elected to establish a [insert 
e ither "trust fund" or "standby 
trust fund"] to demonstrate all 



part 



of 



such 



financial 



respon sibility 



for 



the 



f ncilityt ies ) 



identified 



Sc hedule A; an d 

W hereas, t h e Grantor, 
act ing through its 



Section 



264. 147 



and 



to 



authorized 



officers , 



duly 



has 



obtain 



from 



the 



Branch 



selc cted the Tru stec to be th o 



a ppro va l of *:iich c ove rage tru stee under this Ag reement , 
before t h e ex pi rati o n of th e 



tru s 
and 



t_ee_ 
the 



current liability coverage, 
the owner or operator shall 
cease treatment, storage, or 
disposal of hazardous waste 



act as trustee . 



Trustee is willing to 



Now, Therefore, the 
Grantor and the Trustee agree as 
follows : 



at 



the 



liability 



facility 



until 



coverage 



Section 1. Definitions. 
(a) The term "Grantor 



demonstrated to and approved means [name of the owner or 



by the Branch . " 
(22) Section 264. 151 is 



operator ] . 
(b) The term "Trustee" 



[name 



of 



corporate 



trustee], [insert "incorporated 



478 



NORTH CAROLINA REGISTER 



the 



State 



of 



" or "a national bank" ] , and any 
successor thereof. 

(c) The term 'Branch" 
means the Solid and Hazardous 
Waste Management Branch of the 
Department of Human Reso u rces, 
a n agency of the State of North 
Carolina, and any successor of 
the said Branch. 

(d) The term "Beneficiary" 
means any third party suffering 
bodily injury and/or property 
damage caused by sudden a n d/or 
nonsudden accidental occurrences 
arising from operations of the 

hazardous waste treatment , 

storage , or dispos al 

f acilitv( ies ) , who obtains final 
.judgment or se t tlement against 
the Grantor 

Section 2. Identification 
of Facilities. 

This Agreement pertains to 
the faci li ties identified on the 
attached Schedule A [on attached 
Schedule A list each facility 
and for each facility list the 
identification number, name, and 
address for which financial 
responsibility is demonstrated 
by this Agreement]. 

Section 3. Establishment of 
Trust Fund . The Grantor and the subject , 



property damage caused by each 
sudden accidental occurrence 
and/or each nonsudden accidental 

occurrence arising from 

operation of the f acilityC ies ) 
covered by this Agreement . Upon 
payment , such funds shall no 
longer constitute part of the 

Fund as defined herein. The 

Trustee shall ■ within ten day s 
of disbursement from the fund, 
provide written notice to th e 
Branch of such disbursement. 

Sect io n 5 . Payments 

Com prising the Fund . 

Payments made to the 
Trustee for the Fund shall 



consist of cash, securities, 


or 


other assets acceptable to 


the 



Trustee . 

Section 6. Trustee 
Ma nagement . 

The Trustee shall invest 
and reinvest the principal and 
income of the Fund and keep the 
Fund invested as a single fund, 



without 



distinct ion 



between 



principal 



and 



in 



accordance 



with 



investment 



policies 



general 



and 



lelines which the Grantor may 
nunicate in writing to the 



; tee from time to time, 



however . 



to 



the 



Trustee hereby establish a trust provisions of this section. 



In 



fund 



(the 



"Fund") 



benefit of the Beneficiary. The 
Grantor and the Trustee intend 
t hat no third party have access 
to t h e Fund ex c ept as h erein 



for the investing, 



e.xch; 
managi 



reinvesting , 



ta nging , 



sell ing , 



and 



the principal and 



provided 



The 



Fund 



established 



init ially 



incom e of the Fund, the Truste e 
shall discha r ge h i s duties with 
respect to tine trust fund so lely 



in 



the 



interest 



of 



the 



consisting of the property, Beneficiary and with the care, 



which 



Trustee , 



is acceptable to the 



described 



the 



attached Schedule B, 



ski ll, prudence, and diligence 
it th e circumstances the n 

of 



undei 



property and any other property 
subsequently transferred to the 
Trustee is referred to as the 
Fund, together with all earnings 
and profits thereon, less any 
payments or distributions mad e 
by the Trustee pursuant to th is 
Agreement . The fund sha l l be 
held by the Trustee, IN TRUST, 

a s hereinafter provided. The 

Trustee shall not be responsible 
nor sh al l it undertake any 
responsibility for the amount or 
a dequacy of. nor any duty to 
collect from the Grantor, any 
payments necessary to discharge 
any liabilities of the Grantor. 

Section 4. Payment for 
Bodily Injury and Property 



Suc h prevailing which persons 



prudence , 



acting 



like 



capacity and familiar with such 



matters . 



would use 



the 



conduct of an enterpri s e of a 
like character and with like 
aims; except that: 

(a) Securities or other 

obligations of the Grantor, 
or any affiliates of the 
Grantor, as defined in th e 
Investment Company Act of 
1 940, as amended. 14 U.S.C. 



i0 a-2(a), 



shall 



not 



(b 



acquired or held, unles s 
they are securites or other 
obiligations of the Federal 
or a State qovernmant ; 
) The Trustee is authorized 



Damage to Third Parties. 
The Trustee shall make 



to invest the Fund in time 
or demand deposits of the 



Trustee , 



to 



the 



extent 



payment; 



trom 



the 



Fund in 



accordance with Section 264.147 
or 265.147 of 10 NCAC 10F 



,0032(i) or 



,0033(h: 



Said 



payments shall provide for 



(c 



insured by an agency of the 
Federal or State government; 
and 

) T he Trustee is 

hold casti 



authorized to 



payments from the 



Fund 



to 



persons for bodily injury and/or 



awaiting 



investment 



or 



distribution uninvested for 



NORTH CAROLINA REGISTER 



479 



reasonable 



time 



and 



without liability for the 

payment of interest thereon . 

Section 7. Commingling and 



Investment . 



The Trustee is 



expressly authorized 



its 



discretion : 

(a) To transfer from 

time to time any or all o f 
the assets of the Fund to 
any common, commingled, or 



collective 



trust 



fund 



created by the Trustee in 
which the Fund is eligible 
to participate, subject to 



all 



of 



the 



provisions 



thereof, to be commin g led 
with the nsscts of other 



trusts 



part ic ipat ing 



therein: and 
(b) To purchase shares 

in any investment company 



registered 



under 



the 



Investment Company Act of 
1940, 14 U.S.C. 80a-1 et . 



seg . 



including one whic h 



may 



be created, managed, 



underwritten, or to whi ch 



investmen t 
rendered 



advice 



which 



the 
sold 



Trustee . 



sha r es 
_bv_ 



_of 
the 



vote such shares 



The Trustee m ay 
t its 



discretion ■ 
Section 8. Express Powers 
of Trustee. Without in any way 

limiting the powers a nd 

discretions conferred upon th e 
T rustee by the other provisions 
of this Agreement or by law, 

the Trustee is expressly 

authorized and empowered : 

(a) To sell, excha n ge, 

convey , transfer or 

otherwise dispose of any 
property held by it, by 
public or private s a le. No 

person dea ling w j I h .the 

Trustee shall be bou nd to 
see to the application of 
the purchase money or t o 
inquire into the validity or 
e x pedi g n cy of any such sale 
or oth er dispo sit ion; 

(b) To make, execute, 
acknowledge , and deliver any 

and all docu m ents of 

transfer and conveyance and 
any and all other 



instruments that 



may 



be 



necessary or appropriate to 
carry out the powers herein 
granted; 
(c) To register an y 

securities held in the Fund 
in its own name or in the 
name of a nominee and to 
hold any security in bearer 
form or in book c nt ry, or to 

combine certificates 

representing such securities 
with certificates of the 
same issue held by the 
Trustee in other fiduciary 



capacities, or to deposit or 
arrange for the deposit of 

such secur it ies in a 

qualified central depository 

even though, when so 

deposited, such securities 
may be merged and held i n 
bulk in the name of the 
nominee 
with 



of such depository 
other securities 



deposited therein by another 
person, or to deposit or 
arrange for the deposit of 
any securities issued by the 
United States Government, or 
any a gency or 



instrumentality 



with 



thereof, 



Federal Reserve 



bank, but the books and 
records of the Trustee shall 
at all times show that all 
such securities are part of 
the Fund; 
(d) To d e posit any cash 

in the Fund in 

accounts 



interest-bearing 



maintrained 



savings 



certificates issued by the 



Trustee , 



it s separat e 



corporate capacity, or in 

any o thcr ba nkin g 

i nstitution affiliated with 
th e Trustee, to the extent 
insured by an agency of the 
Federal or State government; 
and 
(e) To compromise or 

otherwise adjust all claims 
i n favor of or against the 
Fund . 
Section 9. Taxes and 



Ex penses. All taxes of any kind 
that may be assessed or levied 
a gainst or in respect of the 

Fund and all brokerage 

comm issions incurred by the Fund 
s hall be paid from the Fund. 
A 1 1 other ex p enses incurred by 
the the Tru ste e in connection 
w ith the administration of this 
Trust, including fees for lega l 

s ervices rendered to the 

T ri istee, the co m pensation of the 
T rustee to the extent not paid 
dj rectlv by the Grantor, and all 

oth er pro per ch arges and 

d is bursements of the Trustee 
shall he paid from the Fund. If 
any disbursements under this 
section cause the fund to fall 
below $ [required coverage], the 
trustee shall, within ten days 
of disbursement from the fund, 
provide written notice to the 
Branch of such disbursement . 

Section 10. Annual Valuation. 
The Trustee shall annually, no 
later than December 1, furnish 
to the Gra n tor a n d to the Branch 
a statement confirming the value 
of the Trust. Any securities in 
the Fund shall be valued at 
market value as of no later than 
November 1 . lite failure of the 



480 



NORTH CAROLINA REGISTER 



Grantor to object in writing to 
the Trustee wihin ninety (90) 
days after the statement has 
been furnished to the Grantor 
and the Branch shall constitute 
a conclusively binding assent by 
the Grantor, barring the Grantor 
from asserting any cla i m or 
li n bilitv ag ain st the T rustce 
w i th rcspe c t to matters 



disclosed i n the st atement . 

Sec tion 1 1 . Advice 
o f C ou nsel ■ 

T h e Trustee ma\ 
tjme to time 



from 
consult 



with 



counsel, who may 


be counsel to 


the Grantor, with 


respect to any 


question arising 


as to the 


interpretation of 


this Agreement 


of any action 


to be taken 


hereunder. The Trustee shall be 


fully protected, 


to the extent 


permitted by law, 


in acting upon 



power; 



and duties as those 



conferred 



upon 



the 



Trustee 



hereunder . 
trustee ' s 



Upon the successor 
acceptance of the 



appointment, the Trustee shall 
assign, transfer, and pay over 
to the successor trustee the 



funds 



and 



properties 



then 



constituting the Fund. If for 
any reason the Grantor cannot or 
does not act in the event of 
resignation of the Trustee, the 
Trustee may app l y to a court of 
competent jurisfiction for the 
appointment of a successor 
trustee or for instructions. 



The successor trustee 



shall 



specify the date on which it 
assumes administration of the 
t rust in a writing sent to t ho 

G rantor, the Branch, an d t he 

pre sent Trustee by c e rtified 
mail at ] c a st ten (10) days 
bef ore such change beco me s 



All orders, requests, and 
i nstructions by the Grantor to 

the Trustee shall be in 

writing, signed by such persons 
as are designated i n the 



attached Schedule 



or s u c h 



oth e r desig i f es as the Grant or 

m ay designa te by amendme nt t q 

Sc lie d til e C . Tli o Tr ustee s h a 1 .1 

be fu lly 

wit li out inq uiry 

with the Grantor's orders 



protecte d i n a ct_ing 
in accordance 



request: 
orders, 



instructions 1 



and inst ruct ions . 

rogu e s t s , 
2Y_ 



the Branch 



All 

and 
to 



the Trustee shall be in writing, 
signed by the Branch Head or his 
designee, and the Trustee shall 
act and shall be fully protected 
in acting i n accordanc e wi th 



such orders, 



requests , 



and 



const itut ing 



absence 



the advice of counsel. 

Section 12. Trustee 
Compensat ion ■ 

The Trustee shall be entitled 
to reasonable compensation for 
its services as agreed upon i n 
writing from time to time with 
the Grantor. 

Section 13. Successor 
T rustee . 

The Trustee may resign 
or the Grantor may replace the 
Trustee, but such resignation or 

replacement sh a ll not be 

effective until the Grantor has n ot ify 
appoi nted a successor trustee 
and this successor accepts the 

appointment . The successor 

trustee shall have the same 



instructions. The Trustee shall 
have the right to assume, in the 
absence of written notice to the 
contrary, that no event 



change or 



termination of the authority of 
a ny person to act on behalf of 
the Grantor or Branch hereunder 
has occurred. The Trustee shall 
have no duty to act in the 



of 



such 



orders , 



r cguests, and instructions from 
the Grantor and/or Branch, 
exce pt as prov i d ed for herein. 



Section 15. Notice of 



Nonpayment 



the 



Il ie trustee shall 
G r a ntor and t h e 



B ra nch by certified mail by no 
later than February 10 if n o 



payment 



into 



the 



Fund 



received from the Grantor during 
the month of January. 

Section 16. A m endment of 

A greement . This Agreement may 

be amended by an instruction in 
writing executed by the Grantor, 
the Trustee, and the Branch, or 
by the Trustee and the Branch if 
the Grantor ceases to exist. 

Section 17. Irrevocability 
a nd Termination. Subject to the 
right of the parties to amend 
this Agreement as provided in 
Section 16, this Trust shall he 
irrevocable and shall continue 
until termianted by the written 
ag reement of the Grantor, the 
Trustee, and the Branch, or by 
t he Trustee and the Branch, if 
the Grantor ceases to exist. 
Up on termination of the Trust, 
a ll re mai ning trust property. 



less final tr us t ad mi nistrat j o n 
expenses , s h a 1 1 _ b e_ d el icered 



to 



effective . 



Any 



expenses 



incurred by the Trustee as 



the Grantor. 
Section 18. Immunity and 

I ndemnification ■ The Trustee 

shall not incur personal 

contemplated by this section liability of any nature in 

provided in connection with any act or 



result 



of 



any 



of the 



acts 



shall be paid as 
Section 9 . 

Section 14. Instructions 
to the Trustee . 



omission, m a de in good faith, in 
the administration of the Trust, 
or in carrying out any 



NORTH CAROLINA REGISTER 



481 



directions by the Grantor or by 
the Branch issued in accordance 



with this Agreement. 



The 



one] 



Trustee shall be indemnified and 

saved harmless bv the Grantor o r 

from the Trust Fund, or both. 

from and against any pe rsonal 

liability to which the Trustee 

may be subjected bv reason of 

any act or conduct in its 

official capacity, including al l 

expenses reasonably incurred in 

its defense in the event the 

Grantor fails to provide such instrument is 

defense . 

Section 19. Choice 
of Law. This Agreement shall be 



personally came [owner or 

qperator] to me known, who, 
be ing bv me duly sworn, did 
depose and say that she/he 
(strike one] resides at 



[address], that she/he [strike 



Ttitle] 



of 



[corporation], the corporation 
described in and which executed 
the above instrument ; that 
she/he [strike one] knows the 
seal of said corporation; that 



the 



seal 



affixed 



to 



such 



administered, construed, 



and 



enforced according to the laws 
of the State of North CArolina. 

Section 20. Interpretation. 
As vised in this Agreement, words 
in the singular include the 
plural and words in the plural 

include the singular. The 

descriptive headings for eac h 



Section o f t hi s A gre oment: shall 

it ion 
this 



not affect the i n terpreatal 
or the legal efficacy of 



Agreement . 

In Witnes Whereof the 
part ies have caused 



this 



Agreement to be executed by 
their respective officers duly 
authorized and their corporate 



seals to be hereunto affixed 
attested as of the date f 



and 
irst 



written above , 



The parties 



below certify that the wording 
of this Agreement is identical 
to the wording specified in 
Section 264 . 1 51 (k) ( 1 ) of 10 NCAC 



10F .0032(i) as in effect on 
date first written above. 

[Signature of Grantor] 
[Title] 

Attest: 



the 



[Title] 
[ Seal ] 



[Signature of Trustee ] 



Attest : 
[Title] 
[Seal] 
(2) The 



following is 



an 


example 


of 


the 


cert 


if icat ion 




of 


acknowledgment which 


must 


accompany a trust 


agreement 


for 


a trust fund as reel 


uired 


bv 




Sec 


t ions 


264. 


147(a)(3)(ii) 




or 


264. 


147(b)(3)(ii) 




or 


265. 


147(a)(3)(ii) 




or 


265. 


147(b)(3)(ii) . 


State 




Stat 


e of [Name of 


A 


Countv of [Name of 


Conn 


ty] 


On this 


[date ] , bef or 


o me 





such corporate 
seal; that it was so affixed by 
order of the Board of Directors 
of said corporation, and that 
she/he [strike one] signed 

her/his [ strik e one] name 

thereto bv like order. 

[Signature] of Notary Public 

My Commission expires: [Date] 
(23) Section 264.151 is 

amended bv adding a new 
paragraph ( 1 ) to read as 



follows ; 



"(1 ) 



A surety 



bond 
into 



guranteeing payment 
trust fund, as 



specified 



Sections 



264. 147(a)(4) 



or 



264. 147(b)(4) 



265. 147(a)(4) 



265. 147(b)(4), 



must 



be 



worded as follows, except 



that 



instructions 



brackets shall be replaced 



with 



the 



relevant 



information and the brackets 
deleted : 

FINANCIAL GUARANTEE BOND 



Date Bond Executed: 



[Date] 



Effective Date [Date] 
Principal: [legal name and 
business address of owner or 



o perator ] 



or g_a ni zation : 
" individual , 
"pa rtn ersh ip, ' 

"cori 



Type 



of 



[ insert 



"trust," 



:porat i^ 
jocj at i_< 

irporat : 



State 



State] 



nejs) 



l_nam 

address (es ) ] 



and 



of 
of 

Surety! ies ) : 



[N ame 



business 



EPA 



Identification Number, name, 



address , 



and 



sudden 



accidental occurrence and/or 



nonsudden 



accidental 



occurrence amount (s) for the 
f ac ility( ies ) guaranteed bv 
this bond [indicate sudden 



accidental occurrence 



and 



nonsudden 



accidental 



occurrence 



amounts 



separately] : 

To ta 1 penal s um of bond : $ 

[Am ount ] Su rety ' s bond 

number: [number] 



482 



NORTH CAROLINA REGISTER 



Kn ow al l Pe rsons hy Th o sn accidenta l oc cu rrences a rising 



Pre sents , 

pr i ncip a I 

he reto arc 
Solid and 



That 

and 
f irmli 



the 



S ur ety ( i es ) 
bound to the 



J I a z a r d o u s 



Management Branch 



of 



Was te 
the 



Department of Hunan Resources 
of the State of North Carolina, 
hereinafter called the Branch, full force and effect. 



from opera tion of any faci lity 

i ?Lriii J f 3.od a bove, as set f orth 

i n Sc ct io n 264.14 7 a n d/or 

265.147 of 10 NCAC 1 OF .0032(i) 
a nd/or .0033(h), then this bond 

sh all be null and void, 

o t herw iso it is to re m a in in 



i n the above penal sum, for the 
payment of which we b ind 



ourselves , 



executors , 



heirs , 



administrators. 



successors, and assigns jointly 
a nd severally; provided that, 
where the Surety(ies) are 

corporati ons act in g aj; 

co-sureties, we , the Sureties, 
bind ourselves in such sum specified in Sections 264.14 7 
"jointly and severally" only and/or 265.147 of 10 N C AC 10F 

■0032(i) and/or .0033(h) and 



Or, if the Principal shall fund 
the standby trust fund in suc h 
am ount ( s ) within fifteen (15) 
d ays after the Branch or a court 
of competent jurisdiction issues 
a n order to do so, 

Or, if the Principal 

sh all provide alternate 

f ina ncial assurance , a s 



for the purpose of allowing a 
joint action or actions a gainst 
any or all of us, and for all 
other purposes each Surety 



obtain the Branch's 



written 



appr oval of 



-uch 



isurance , 



binds 



itself, 



jointly and 



severally with the Principal. c ancellation 
for the payment of such 
only as is set forth 



within ninety (90) days after 
receipt of not ice of 



J?X- 



both 



the 



;jte 
the name of such Su r ety, but if 
no limit of liability i s 



Princi pal a n d the Branch from 
the S u rety(ies), then thi s 



obligation 
void, otherwise 



^hall be null and 



it 



to remain 



indicated , 



the 



1 imit 



of 



liability shall be the full 

a mount of the penal sum . 

Whereas said Principal 
is required to have a permit or 
interim status in order to own 
or operate each hazardous waste 
m anagement facility identified 
above and 

Whereas said Principal is 
required. pursu a nt to 40 CFR 



i n f u ll f orce a nd effect . 

The Surety(Jes) shall became 
liable on this bond obligation 
o nly when t h e Principal h as 
fai led to fulfill the conditions 

described above. Upon 

n otification by the Branch tha t 
the Principal has failed to 
perform as guaranteed by this 
bo nd , 
fulfill 



the Surety(ies) shall 



this 



obligat io n . 



264.147 and/or 265.147, codified Ho wever. no liability shall 
at 1 NCAC 10F .0032 (i) and/or att; 



:ach 



to 



the 



.0033(h) 



demonstrate 



respectively , 



to 



her 



Surety( ies ) 



financial 



the 

responsibility for bodily i njury Sin: 

for 



eunde r u ntil the Principal or 

Branch notifies the 



and property damage to t hird 

parties caused by each sudden property da ma ge 

accidental occurrence, or each accidental 



ety(ies) of a possible claim 
bodily injury and/or 



caused 



by 



sudden 



accidental 



occurrence 



form 



occurrences arising 
of the 



and each nonsu d den accidental 
occurrence, as a condition of 
the permit or interim status, 
a nd 

Whereas the amount of 
such fi n ancial responsibi lity 
that must he demonstrated is $ 1 



operation 



f acility( ies ) identified above. 
Such noti c e shall a u tomatically 
extend, for a period of three 
y e ars, the ob ili n ation of t he 
S j i rcty(ies) to pay for b odily 
in jury and property damage 
s uch accidental 



;cd 



mill ion 



per 



each 



sudden 



Jsy. 



accidental occurrence with a n 
annual aggregate of at least $2 
million, exclusive of legal 
defense costs, and $3 million 
per each nonsudden accidental 
occurrence with an annua l 
aggregate of at least $6 



can; 

oc currences pr i or to the date 

upor 



would 



whi c h this Surety Bond 



otherwise 



have 



been 



te rminate d . 

Tine Surcty(ies) shall become 
liable on this bond obligation 
only when the Principal has 



fail 



Lied to fulfill the conditions 
million, exclusive of legal described above . Upon 



defense costs 

" NOW, THEREFORE, the conditio n 

such that 



of this obliga ti on i 
if 



notification by the Branch that 
t he Principal h a s failed to 



while this 



bond 



effect, the Pri nci pal s ha ll p ay, 
u p to the limits set f 



above, for bodily injury 



ort h 
and 



per 
bon 
pla 



form as guaranteed by this 
d , 1 1 i e Surety(ies) sha ll 



f unds 



the 



amount 



property damage caused 



by. 



an 

int 
dir 



a ranteed for the facility* ies ) 



es th e standby trust fund as 

ected by the Branch. 



NORTH CAROLINA REGISTER 



483 



The Surety(ics) shall become 
liable on this bond obligation 
only for amounts for which it 
(they) has (have) been presented 
a final judgment or settlement 
agreement against the Principal 



for bodily 



lmurv 



and/or 



property damage caused by an 



accidental 



occurrence 



occurrences arising from the 
o peration of the f acil ity( ies ) 
identified above. Said judgment 



shall be accompanied 



by 



statement 



signed 



_by_ 



the 



claimant's attorney of record 
stating that the judgment was 
either ( 1 ) rendered by the 



highest 



court 



the 



jurisdicat ion where the action 
was brought and the Principal 
exhausted all rights of appeal, 
or (2) rendered by the highest 
court which rendered a 
a nd no appeal was 



judgment 
m ade by 
Principal to a higher court 
within the time allowed by 
ap plicable statute or rule, or 
(3) agreed to by the Principal. 
The liability of the 

Surety( ies ) shall not be 

discharged by any payment or 



bodily injury and property 
damage to third parties caused 

by accidenta l o ccurrences , 

provided that the penal sum does 
not increase by more than 20^ in 
any one year . and no decrease in 
the penal sum takes place 
without the written approval of 
the Branch . 

In witness Whereof, the 
Principal and Surety(ies) have 

executed this Financial 

Guarantee Bond and have affixed 
t heir seals on the date set 
forth above . 

The individuals whose 
signatures appear below hereby 
certify that they are authorized 
to execute this surety bond on 
b ehalf of the Principal and 
Surety(ies) and that the wording 
of this surety bond is identical 
to the wording specified in 
S ection 264.151(1) of 10 NCAC 
10F ,0032(i) as in effect on the 
date this bond was executed. 



Princ ipal 



[Sign ature ( s ) ] 



succession 



of 



payments 



hereunder, unless and until such 
paynent or payments sh- i ll amount 
in the aggregate to the penal 
sum of the bond, but in no event 



[Title(s)] [Name(s)] [Corporate 
seal] [Corporate Surety(ies)] 
[Name(s) and address(es)] State 
of incorporation [Name of State] 



Lia bilty 



limit : $ 



[ Signature ( s ) ] 



[Name ( s ) 



[Amount ] 



and 



title(s)] [Corporate seal] [For 



every 



co-surety , 



provide 



shall the obligation of the signatures ( s ) , corporate seal, 



Suretv(ies) hereunder exceed the 
amount of said penal sum . 

The Suretv(ies) may cancel 
the bond by sending notice of 
cancellation by certified mail 
to the Principal and to th e 
Branch, provided, however, that 
cancellation shall not take 



effect until 



at 



least 



and other information in the 
same manner as for the Surety 
above.] Bond premiun: $ [Amount] 
(24) Section 264.151 is 

amended by adding a new 
paragraph (m) to read as 
follows: "(m) A letter of 
credit, as specified in 
Sections 264.147(a)(5) or 



hundred and twenty ( 1 20) da ys 
after the date of receipt of th e 
notice of cancellation by both 
the Principal and the bra n ch , as 



264. 147(b)(5) 



or 



265.147(a)(5) 



265. 147(b)(5), 



must 



be 



shown by the latter 



return 



receipt, and provided f urt her 
t hat such notice shall not 
d ischarge any obligations of the 
Surcty(ies) hereunder which may 
h ave arisen prior to tine receipt 
of such notice. 

The Principal may terminate 
this bond by sendi n g written 
notice to the Snrety(ies), 
provided, however, that no such 
notice shall become effective 
until the Suretv(ies) receive(s) 
written authoricat ion by the 
Branch for termination of the 
bond . 

[The following paragraph 
is an optional rider that may be 
included but is not required.] 

The Principal and Surety(ies) 
hereby agree to adjust the penal 
sum of the bond yearly so that 
it guarantees a new a m ount of 
financial responsibility for 



worded as follows, except 

that instructions in 

bra ckets are to be replaced 

wit h the relevant 

in form at ion and the brackets 
deleted : 



IRREVOCABLE STANDBY LETTER 
OF CREDIT 
Solid and Hazardous Haste 
Management Branch P. 0. Box 
2091 Raleigh, N. C. 27602 
Dear Sir or Madam : 



He herbv establish our 
Irrevocable Standby Letter of 

Credit Ho. [Number] in your 

f avor, at the request and for 
the account of [owner's or 
operator's name and address] up 
to the aggregate amount of [i n 
words] U.S. dollars ($ 



[Amount ] ) , 



available 



upon 



presentation, by vou or your 
designee, of 

(1) Your or your designee's 



484 



NORTH CAROLINA REGISTER 



si gned statement reading 
c ertify that 

th e dra ft 

payable pursuant to Soctior 
264.147 and/or 265.147 of 



_a^> 

follows: "I certify that th e 
amount of t h e draf t is 

10 

NCAC 10F .0032 and/or .0033, 
regulations issued u n der 

C arolin a 
Chapter 



a uthority of North 
General Statutes. 



130A." 
This letter 



of credit is 



effective as o f [date] 



_a 

expir e o n [date at Ion 

) year l a ter]. I ) 1 1 1 sj i 

c xp i rat ion dat e shall 



automatically cxt en ded for 
period of [at least 



year] on [date] and 



st 

cii 

be 

a 

j_) 

ch 



successive ex pirati o n dat^ 

unless, at least one hu n dred a 
twenty (120) days before t 



curent 



expiration date, 



notify botli you and [ owner's or 
operator's name] by certif i 
mail that we have decided no t 
extend this letter of cred 
beyond the current exnirati 



date . 



In the event you are 



notified, any unused porti on 
the credit shall be avnilah 
upon presentation of y our 



your designee's sight draft fo r 
one hundred and twenty (12 
days after the date of recei 
of notification by both you a 
[ owner ' s or operator's n a Tie 



nd 
ie 

we 
or 
ed 
to 
i± 

9-H 

so 

of 

Is. 

or 
or 

P_2 

Pt 
nd 

I 



as shown on the latter of the 
S i gnod rctu rn re cei pts . 

When eve r th is letter of 

credit is drawn on, under, 



in complaincc with the t e rms 
this cred i t, wc shall d u ly h on 
such draft upon presentatio n 
us, and we shall pay the amm i 
of the draft in accordance wi 



nd 
of 
or 
to 
nt 
th 



your 



your 



designee ' s 



instructions . 
We certify that the wording 



of this 



letter of credit 



identical 



to 



the 



wordi 



specified jn Section 264. 15( 
of 10 NCAC 10F .0032(i) as 



effect 



on 



the 



date 



sho 



im me_ d_i ately b elow . 

Sianaturc(s) and title(s) 
official ( s ) 



of 



institution] [ Date] This cred 
is subject to [ insert "the mo 
recent edition of the Unifor 



Customs 



and 



Practice 



Documentary Credits. publish 
by the International Chamber 



Commerce '_ 
Commercial 



"The 



Unifo 



is 

n.q 
ml 

j_n 
wn 
_t 
of 

oa 

it 
st 

rm 
or 
ed 
of 

rm 



Code" . ] 



>llov 



"(n) 



corpora 



(25) Section 264.151 is 
amended by adding a 
paragraph (n) to read 
fo 

gu 

Se 

26 
as 
in 
to 



larantee. 



specified 



actio ns 
i5. 147(h), 



264. 147(h) 



must be worri 



follows, except 



th 



i stuctions in brackets a 
be replaced with t 



ew 
as 
te 
in 
or 
ed 
at 
re 
he 



relevant information and the 

brackets deleted: 

CORPOR A TE GjJAR NATE E FOR 
LIABILITY COVERAGE 
Guarantee made this [date] by 
[name of guaranteeing entity], 

a bus iness corporation 

o rganized under the laws of th e 
State of [insert name of 
State], herein referred to as 
gu ara ntor, on behalf of ou r 
su bsi diary [owne r or ope rator] 
of [ h 1 1 si n e s s a (Ul rcr.s ] , to any 

and a 1 1 t hi rd parties wh o h aye 

5 y sta ined or m ay su stain bodily 
i njury or p r operty d amage 
cau sed by [ sudden and/ o r 



nonsudd en ] 



accidental 



occurrences 



arising 



from 



o perations of the f acil itv ( ies ) 

covered by this gurantcc . 

Recitals . 

1 . Guarantor meets or exceeds 

the financial test criteri a 

a nd agrees to comply with 

the reporting reguirements 

for guarantors as specif i ed 

in Secti ons 264.147(f) 

and/or 265.147(f) of 10 NCAC 



10F 



0032m 



and/or 



.0033(h) . 
(2) [Owner or Operator] owns 
or operates the following 
haza rdous waste management 



facil itv( ie s ) 



covered 



this gu arant ee: 
e ach fac il ity : 



hX 



[List fo r 
EPA 



ide nt i f icat i en n um ber, na me , 

an d ad dress . JThis corpo r a te 

guara ntee satisfies R CRA 



third-party 



liability 



for [ insert 



reguirements 

"su d den" or "nonsudden" or 

"both s u d den and nonsudden" ] 

accidental occurrences in 

above-named 



owner 



or 



operator 



facil it ies 



for 



[insert dollar amount] of 

coverage . 

3 . For value received from 

[owner or operator], guarantor 
to any and all 




parties 



who 



have 



ained 



may 



sustain 



dama 



ly injury and/or property 
go caused by [sudden 



and/or nosudden] accidental 
occurrences 



operat ions 



arising 



from 



of 



the 



facil ity( ies ) covered by this 
guarantee that in the event 
that [owner or operator] fails 
to satisfy a judgment or award 
based on a determination of 
liability for bodily injury 
a n d/o r property damage to 



third parti es caused 

[ sudd en an d/or nonsu 



bx 



nonsudden ] 



accidental occurrencs. arising 
from the operation of the 
above-named facil ity( ies ) , or 
fails to pay an amount agreed 
to in setttlement of a claim 
arising from or alleged to 



NORTH CAROLINA REGISTER 



485 



arise from such injury or 
damage, the guarantor will 



satisfy 



award ( s ) , 



such judgment ( s ) , 



settlement 



agreement ( s ) up to the limits 

identified above. 

4. Guarantor agrees that if, 
at the end of any fiscal 
year before termination of 



thi; 



guarantee, 



the 



guarantor fails to m e et the 
financial test criteria, 
guarantor shall send within 
90 days, by certified mail, 
notice to the Solid and 
Hazardous Waste Management 



Branch 



(Branch ) 



and 



to 



[owner or operator] that he 
intends to provide alternate 

liability coverage as 

in Sections 



specified 



264.147 and/or 265.147, as 
applicable, in the na m e of 
[owner or operator]. Within 
120 days after the end of 

such fiscal year, the 

guarantor shall establish 

such l iability coverage 

unless [owner or operator- 
has done so ■ 
5. The guarantor agrees to 

notify the Branch by 



certified 



mail 



of 



voluntary or involuntary 
proceeding under Title II 
(Bankruptcy), U.S. Code, 
naming guarantor as debtor, 
within 1 days after 



commencement 



of 



the 



proceeding . 

6. Guarantor agrees that 
within 30 days after being 
notified by the Branch of a 
determination that guarantor 

no longer meets the 

financial test criteria or 
that he is disallowed from 
continuing as a gu a rantor, 
he shall establish alternate 

liabil itv cove rage as 

specified in Section 264.147 
and/or 265.147 in the name 
of the owner or operator, 
unless [owner or operator] 
has done so. 

7. Guarantor reserves the 
right to modify this 



agreement 



to 



take 



into 



account 



amendment 



or 



modification 



of 



the 



liability requirements set 
by Section 264.147 and/or 
265.147, provided that such 
modification shall become 
effective only if the Branch 
does not disapprove the 
modification within 30 days 
of receipt of notification 
of the modification. 
8. Guarantor agrees to remain 
bound under this guarantee 
for so long as [owner o r 
operator] im i st com p ly wit h 
the applicable reguircments 



of Section 264.147 and/or 
265.147 for the above listed 
facilitv( ies ) , except as 
provided in paragraph 9 of 
this agreement . 
9 . Guarantor any terminate 

this guarantee by sending 
notice by certified mail to 
the Branch and to [owner or 
operator]. provided that 
this guarantee may not be 
terminated unless and until 
[the owner or operator] 
obtains, and the Branch 



a pproves , 



alternate 



10. 



laibility coverage complying 
with Sections 264.147 and/or 
265. 147. 

This guarantee is 



to be 



interpreted and enforced in 
accordance with the laws of 
the State of North Carolina. 
1 1 . Guarantor herby expressly 
waives notice of acceptance 
of this guarantee by and 
party . 
I hereby certify that 

the wording of this 

guarantee is identical to 
the wording specified in 
Section 264.151(n) of 10 

NCAC H)F .0032(i) . 

Effective date: [Name of 

guarantor ] [Authorized 

signature for guarantor] 

[Name of person signing] 

[Title of person signing] 

Signature of witness or 

notary : 

(k) The provision for "Tanks" 

contained in 46 Fed. Reg. 2,867, 

2,868, 2,895, and 35,249 (1981) 

[to be codified in 40 CFR 

264.190 to 264.200 (Subpart J)] 

have been adopted by reference 

as amended by 46 Fed. Reg. 

35,249 (1981); 50 Fed. Reg. 2004 

(1985); and 51 Fed. Reg. 25,472 

to 25,478. 

.0033 INTERIM STATUS STANDARDS 
FOR HWMF's - PART 265 

(b) "General Facility 
Standards" contained in 45 Fed. 
Reg. 33,234 to 33,236 (1980) [to 
be codified in 40 CFR 265.10 to 
265.17 (Subpart B)] have been 
adopted by reference as amended 
by 48 Fed. Reg. 14,295 (1983); 
50 Fed. Reg. 18,374 and 28,749 
(1985); a nd 51 Fed. Reg. 25,478 
and 25,479 (1986) . 

(e) The provisions for 
"Manifest System, Recordkeeping, 
and Reporting" contained in 45 
Fed. Reg. 33,238 and 33,239 
(1980) [to be codified in 40 CFR 
265.70 to 265.77 (Subpart E)] 
have been adopted by reference 
as amended by 45 Fed. Reg. 
86,970, 86,974 (1980); 46 Fed. 
Reg. 7,680 (1981); 48 Fed. Reg. 
3,982 (1983); 50 Fed. Reg. 



486 



NORTH CAROLINA REGISTER 



18,374 (1985); and 51 Fed. Reg. 
25,479 (1986). 

(g) The provisions for 
"Closure and Post-Closure" 
contained in 45 Fed. Reg. 33,242 
and 33,243 (1980) [to be 
codified in 40 CFR 265.110 to 
265.120 (Subpart g)] have been 
adopted by reference as amended 
by 46 Fed. Reg. 2,875, 2,876, 
and 2,877, and 2,896 (1981); and 
51 Fed. Reg. 16,451 to 16,455, 
a nd 25,479 (1986); except that 
40 CFR 265.120 (b) is rewritten 
as follows: "If at any time the 
owner or operator or any 
subsequent owner of the land 
upon which a hazardous waste 
facility was located removes the 
waste and waste residues, the 
liner, if any, and all 
contaminated underlying and 
surrounding soil, he may add a 
notation on the deed to the 
facility property or other 
instrument normally examined 
during title search, indicating 
the removal of the waste." 

(h) "Financial Requirements" 
contained in 45 Fed. Reg. 33,243 
and 33,244 (1980) [to be 
codified in 40 CFR 265.140 to 
265.151 (Subpart H)] have been 
adopted by reference as amended 
by 46 Fed. Reg. 2,877 to 2,888 
(1981); 47 Fed. Reg. 15,064 to 
15,074, and 16,558 to 16,561 
(1982); and 48 Fed. Reg. 14,295 
and 30,115 (1983): and 51 Fed. 
Reg. 16,455 to 16,458, 25,479, 
(1986), except that 40 CFR 
265. 143(a)(3), (a)(4) ■ (a)(5), 
(a)(6), 40 CFR 265.145(a)(3), 
(a)(4), (a)(5), (a)(6), 40 CF R 



265. 147(a), 



and 



40 



CFR 



265.147(b), are not adopted by 
reference . 

( 1 ) The following shall be 



subst ituted 



for 



the 



provi sions 



of 



40 



CFR 



265.143(a)(3) which were not 



adopted by reference 



"The 



owner or operator must 
deposit the full amount of 
the closure cost estimate at 



the 



time 



the 



fund 



established. Within 1 year 
of the effective date of 
these regulations, an owner 
or operator using a closure 
trust fund established prio r 
to the effective date of 

these regulations shall 

deposit an amount into the 
fund so that its value after 
this deposit at least equals 
the amount of the current 
closure cost estimate, o r 
shall obtain other financial 

a ssuranc e a s specified in 

this sect ion . " 
(2) The following shall be 



subst ituted 



for 



the 



provisions 



of 



40 



CFR 



265.143(a)(4) which were not 
adopted by reference : 



"Deleted" 
(3) The following shall be 



substituted 



for 



the 



pr ovision s 



of 



40 



CFR 



265.143(a)(5) which wore not 

adopted by reference : 

"Deleted" 
(4) The following shall be 



substituted 



for 



the 



provi s ions 



of 



40 



CFR 



265.143(a)(6) which were not 



adopted 



by 



reference : 



"Aft er the trust fund is 
establ ished , 



whenever the 



current 



closure 



cost 



:t i mate chnnr 
• ope rat or must 



the 



new 



estimate 



com p are 
with 



the 
the 



tru stee's m o st recent annual 
valuation of the trust fund. 
If the value of the fund is 
less than the amount of the 
new estimate, the owner or 
operator within 60 days 
after the change in the cost 

est imate , must either 

d eposit an amount into the 
fund so that its value after 
this deposit at least equals 
the amount of the current 
closure cost estimate, or 

obtain other financial 

assurance as specified in 
this section to cover the 



difference ■ " 
(5) The following shall be 



subst ituted 



for 



provision; 



of 



40 



_the 
CFR 



265.145(a)(3) which were not 
adopted by reference : "The 
owner or operator must 
deposit the full amount of 



the 



post-closure 



cost 



estimate at the time the 
fund is establis h ed. Within 
1 year of the effective date 
of these regulations, an 
p wner o r operator using a 



post-closure trust 



fund 



established prior to tiie 
effective date of these 
regulations shall deposit an 
amount into the fund so that 
its value after this deposit 
at least equals the amount 
of the current post-closure 
cost estimate, or shall 

obtai n other fi nancial 

assurance as specified in 
this Section . " 
(6) The following shall be 



substituted 



for 



the 



provisions 



of 



40 



CFR 



2 65.145(a)(4) which were not 

adopted by. reference : 

"Deleted" 
(7) The following shall be 



subst ituted 



for 



the 



provisions 



of 



40 



CFR 



265.145(a)(5) which were not 
a dopted by reference : 



"Deleted" 



NORTH CAROLINA REGISTER 



487 



(8) The following shall be 
substituted for t h e 



provisions 



of 



40 



CFR 



265.145(a)(6) which were not 



adopted 



by 



reference : 



"After the trust fund is 
established, whenever the 
current post-closure cost 
estimate changes during the 

operating life of the 

facility, the owner or 
operator must compare the 



estimate 



with 



the 



trustee's most recent annual 
valuation of the trust fund. 
If the value of the fund is 
less than the amount of the 
new estimate, the ovmcr or 
operator, within 60 days 
after the change in the cost 



estimate , 



must 



either 



deposit an amount into the 
fund so that its value after 
this deposit at l e ast equals 
the amount of the current 
post-closure cost estimate, 
or obtain other financial 
assurance as specified in 
this section to cover the 
difference . " 
(9) Section 265. 141 is 

amended by adding a new 
paragraph (h) to read r> s 
follows: "(h) "Branch" 



the 



Solid 



and 



Hazardous Waste Management 
Branch of the North Carolina 

Department of Human 

Resources . " 
(10) The following shall be 



substituted 



for 



the 



provisions 



of 



40 



CFR 



265.147(a), which was not 

adopted by. reference : 

"Section 265.147 Liability 
requirements . 
(a) Coverage for 
sudden accidental 



oc cur r e n cos , 



effect ivc 



date 



_By_ 



the 



of 



an_ 
a 



owne r oi 
hnzardou; 



re qui at io ns , 

° Bfi ra tor of 

wa stc treatment , r .torn q^j or 

d ifipos.i 1 f nc. i 1 it y . o i ; n 

gr oup of su ch facilities , 
must de m onstrate financia l 
responsibility for bodily 
injury and property damage 
to third parties caused by 



sudden 



accidental 



occurrences 



arisin g 



from 



operations of the facility 
or group of facilities. The 
owner or operator must have 
and maintain liability 



coverage 



for 



sudden 



accidental occurrences in 
the amount of at least $1 
million per occurrence with 
an annual aggregate of a t 
least 02 million, exclu sive 
of le g al defen s e costs. 
Thi s li abi lity coverage may 
be d emonstra ted as s p eci fied 



(a)(2), 



paragraphs 



(a)(3), 



(a)(1), 



(a)(4), 



(a)(5), and (a)(6) of this 
section : 



( 1 ) An owner or operator 



may 



demonstrate 



the 



required 



coverage 



_by_ 



1 iability 



having 



liability insurance as 



specified 



this 



paragraph 

(i) Each insurance policy 
must be amended by 



attachment 



of 



the 



Hazardous Waste Facility 
Liability Endorsement or 

evidenced by a 

Certificate of Liability 
Insurance. The wording 
of the endorsement must 
be identical to the 
wor ding specified in 

The 
the 



Section 264. 151 (i) . 
wording of 



certificate of insurance 
must be indentical to 
the wording specified in 
Section 264.151 ( i ) ■ The 
owner or operator must 

submit a signed 

duplicate original of 
the endorsement or the 
certificate of insurance 

to the Branch. If 

requested by the Branch, 
the owner or operator 
must provide a signed 
duplicate original of 
the insurance policy. 
(ii) Each insurance 

policy must be issued by 
an insurer which, at a 
minimum, is licensed to 
transact the business of 
insurance, or eligible 
to provide insurance as 
an excess or surplus 
lines insurer, in one or 
more St ates. 
(2) An o wner or o p erator ma y 
m e ct t he re qui r oments of, 

i h i s s ectio n by j>a fining a, 

financial te st o r u s i ng t he 
cor pj} ra to <n i a r antce for 



1 iahii i ty 



coverage 



specified in paragraphs (f) 
and (h) of this section. 
(3) Liability trust fund. 

(i) An owner or operator 



may 



demonstrate 



the 



required 



liability 



coverage by establishing 

a sudden accidental 

occurrences liability 

trust fund which 



conforms 



to 



the 



requirements of this 



paragraph 



and 



by. 



su bmitting an originally 
sig ned d u plicate of the 
trust agreement to the 



Branch ■ 



The trustee 



mus t be an enti ty whic h 

li as th e aiitho ritv to act 



408 



NORTH CAROLINA REGISTER 



a s a trustee 
trust o perat ions 
regulated a n d_ 
by a federal 



and wh ose 
are 



exam ined 
or State 



ag enc y . 
(ji) The wordi n g of the 
agreement must 



t rust agreement must be 
identical to the wording 
specified in Section 
264. 151 (k)( 1 ), and the 
trust agreement must be 
accompanied by a formal 
cert if icat ion of 



acknowledgment 



example , 



[for 



Sect ion 



264. 151 (k)(2)] . 
(iii) On the date of the 
initial establishment of 
the sudden accidental 
1 iabil itv 



occurrences 



trust fund, the value of 
the fund shall be at 



least 



two 



nillion 



dollars ($2,000,000), or 
such other amount as 



regulred by the Bra nch 

pu rsu a nt t o Sectio n 

2 65.147(c) or (d). 
( iv ) If an owner or 



operator 



other 



substitutes 
financial 



assurance 



specified 



in this 



:ction for all 



or part of the sudden 
accidental 



occurrences 



liability trust fund, he 



may submit 



wr itten 



request to the Branch 



for 



release 



of 



the 



amount in the trust fund 
in excess of the amount 
of the required coverage 
to be demonstrated by 
the sudden accidental 



occurrences 
trust fund, 
(v) A ny 



liability 
who 



person 



obta i ns final judgment or 
settlement against the 



operator 



for 



bodily 



ln.turv 



and/or 



property damage caused by 

a sudden accidental 

occurrence or occurrences 
arising from the operation 
of the facility m ay 
request payment from th e 

sudden accidental 

occurrence liability trust 
fund in satisfaction of 



the 



.judgement 



s ettlement by submitting 

to the Trustee : 

a. In the case where a 
person has obtained a 



final 



judgemnt , 



certified copy of the 



judgment 



and 



statement, signed by the 
claimant's attorney of 



record , 



that 



the 



judgement was either ( 1 ) 
rendered by the highest 



court 



the 



.jurisdiction where the 
a ction was brought an d 
th e ow n er or operator 
c x hjvu sted a ll rights of 
r ( 2 ) rendered 



by 



wh icli 



-al, < 
the hi g host court 



rendered 



jud gment and no appeal 
was made by the owner or 
operator to a higher 
court within the time 
allowed by applicable 
statute or rule, or (3) 
agreed to by the owner 
or operator; or 
b . In the case of a 



settlement , 



o riginally 



duplicate 



of 



signed 



the 



settlement agreement and 
an o ri ginally signed 
duplicate of the release 



of a l l claims. 

(vi ) Aft er receiving the 

m at c rial described in 
Secti on" 265. 147(a) (3 )(v) 
a bove, the Trustee shall 
pay to the person who 
obta i ned the judgment or 
settlement such amount 
of the judgment or 
settlement , but not to 
exceed the amount of the 
fun ds in the trust. 

(vii) No trust shall be 
terminated without prior 
written consent of the 
Branch. The Branch may 
agree to termination of 
the trust when it has 



determined 



that 



the 



owner or operator ha s 

substituted alternate 

f inane ial assurance as 



specified 



this 



section , 



when 



it 



a pproves 



the 



certification of closure 

of the facility 

submitted pursuant to 
Sect ion 265.1 15." 



(11) Section 265.147(a) 
is amended by adding a 
new paragraph (4) t o 



read as follows : 



(4) 



Surety bond guaranteeing 
pa yment into a sudden 
occurrences 



accidental 



liability trust fund, 
(i) Any owner or operator 
may demonstrate the 



required coverage 



bx 



obtaining a surety bond 
which conforms to the 



reguirements 



of 



this 



paragraph 



and 



by 



submitting t h e surety 



bond to the Branch , 



The 



surety company issuing 
the bond must, at a 
m inimum, be among those 
listed as acceptable 



sureties 



Federal 



bonds in Circular 570 of 



NORTH CAROLINA REGISTER 



489 



the U.S. Department of 
Treasury ■ 

( ii ) The wording of the 
surety bond must be 
identical to the word i ng 
specified in Section 
264.151(1 ) . 

( i i i ) The owner or 



operator who uses a surety 



bond 



to 



satisfy the 



requirements of Section 



265.147(a) 



shall 



also 



establish a standby trus t 
fund. Under the terms of 



the 



surety bond, all 



payments made thereund er 
shall, in accordnnce wi th 

instructions from the 

Branch, be deposited by 
the surety directly int o 
the standby trust f und. 
This standby trust shall 

meet the require ment § in 

Section 265.147(a)(3), 
except that : 
a. An originally signed 
duplicate of the trust 



agreement 



shall 



be 



submitted to the Branch 
with the surety bond; 
and 
b. Until the standby 
trust fund is fun ded 

the 



to 



pursuant 
requirements of Secti on 
26 5.147(a)(4)(yiii), the 
followin g are not 



require d : 



(i) payment 



into the trust fund as 
specified in Section 
265.147(a)(3)(iii) ; (ii) 



annual 



valuations 



required by the trust 



ag ree ment 



[ see 



264. 151 (k)(l) 
10]; and (iii ) 



Sect ion 
not ices 



of 



nonpayment 



required by the trus t 



a greement 



[see 



264. 151 (k)(l) Section 

( iv ) The bond sh all 

gu arantee tha t t he owner 
or operator shall : 
a. Fund the standby 
trust fund in an amount 
equal to either the sum 
of the judgment or 
settlement described in 



Section 
265.147(a)(4)(vii) 



and 



the 



cost; 



of 



administering said fund , 
or the amount of th e 
penal sum, whichever is 



less , 



within 



fifteen 



(15) days after 



the 



Branch or 



court of 



competent 



.jurisdictio n 



is sues an order to that 

effect; or 

b ■ Pr ovide alternate 

financial assurance as 



specified 



in 



this 



section, and obtain the 
Branch's written approval 



of 



the 



assurance 



provided. within ninety 
(90) days after receipt 
by both the owne r or 



operator 



and 



by 



the 



Branch of 



notice of 



cancellat ion 



of 



the 



surety bond from the 
surety . 
(v) Under the terms of 



the 



bond. the surety 



s hall become liable on 
the bond obligation when 
the owner or operator 
does not perform as 
guaranteed by the bond, 
(vi) The penal sum of the 
bond shall be at least two 



mill ion 



dollars 



($2,000,000), 



such 



other am ou nt as required 
by the B r a n ch pursuant t o 
Section 265.147(c) or (d). 
(vii) If an owner or 



operator 



substitutes 



other 



financial 



assurance as specified 
i n this section for all 
or part of the surety 
bon d, lie nay submit a 
written request to the 
B ranch for release o f 
the amount of the penal 
sum of the bond in 
excess of the amount of 
the required coverage to 
be demonstrated by the 
surety bond . 
(viii) Any person who 

obtains final judgment 
or settlement against 
the owner or operator 
for bodily injury and/or 
property damage caused 
by a sudden accidental 

occurrence or 

occurrences arising from 
the operation of the 
facility may request 
payment from the surety 
bond in satisfaction of 



the 



judgment 



settlement by submitting 

to the Trustee: 
a . In the case where a 
person has obtained a 



final 



judgment , 



certified copy of the 
judgment and a statement 
signed by the claimant's 
attorney of record that 
t he judgment was either 
( 1 ) rendered by the 
h ighest court in the 
jurisdiction where the 
action was brought and 
the the owner or operator 
exhausted all rights of 
appeal. or (2) rendered 
by the highest cou rt 
which re ndered a jurl gmen t 
and no appeal was made by 



490 



NORTH CAROLINA REGISTER 



the owner 



ope r ator 




ap plic a blc sta tu te o r 



rule, or ( 3 ) agr eed to by 
t h e owner or op e rator; or 
b. In the case of a 

an 



settl em ent , 
originally 



duplicate of 

agreeme nt 

originally 



signed 



settlement 
and an 



signed 



duplicate of the release 
of all claims . 
( ix ) After receiving the 
m aterial described in 
S ect i on 

265. 147(a)(4)(viii) 
above, the Trustee shall 
notify the Branch of the 
amount of such judgme nt 
or settlement . The 



Branch 



shall 



then 



instruct the owner or 
operator to pay to the 



trustee 



such amount: 



not to exceed the amount 
o f the judgment or 

settlement , and the 

costs of admi nister in g 
said fund, or the amou nt 

of the required 

coverage, whi c hever is 



less. 



If the ov; n e r or 



aerator 



fails 



to 



perform as required by 



the 



Branch' 



instructions, the Bra nch 

shall instruct the 

surety to place funds in 
the amount g u aranteed 
for the f acilityC ies ) 
into the standby trust 
fund. The trustee shall 
pay to the person who 
obtained the judgment or 
settlement such amount 
of the judgment or 
settlement, but not to 
exceed the amount of the 
funds in the trust . 
(x) Under the terms of 
the bond, the surety ma y 
cancel the bond by 
sending wr i tten notice 

of cnncella t ion by. 

cc rtified m a _i 1 to th e 
owner or operator a n d t o 
the Branch . 



Canccllat ion 



may 



not 



take effect, however, 
until at least one 
hundred twenty (120) 
days after the date of 
recei pt of the noti ce of 
ca nee Hat ion by b oth the 
owner or operator and 
t he Branch, as shown by 

the latter return 

receipt . 
(xi) No bond s h all be 
cancelled without prior 
written consent of the 
Branch. The Branch may 



agree to cancellation of 
the bond when it has 


determined that 


the 


owner or operator 


has 



sub st it u Led 



alternr 



f inn ncia 1 assurance 



tc 
as 



specified 



in 



section, or 



thi s 
it 



approves 



the 



certification of closure 



of 



the 



facility 



submitted pursuant to 
Section 265.1 15." 
(12) Section 265. 147(a) 
is amended by adding a 
new paragraph (5) t o 



read as follows: 



"(5) 



Letter of credit . 
(i) An owner or operator 



nay 



demonstrate 



the 



required coverage 



by 



obtaining an irrevocable 
letter of credit which 



conforms 



to 



the 



requirements of this 



parag raph 



and 



Jbjy. 



su bmitting the letter to 
the Branch. The issuing 
institution shall lie a n 
ent it y which has the 

auth o rity to issue 

letters of credit and 
w hose letter of cred it 
operations are regulated 
and exami ned by a 



Federal 


or 


State 


agency . 


(ii) 


The 


wording 


of 


the 


letter 


of 


credit s 


hall 


be 


indet ical 


to 


the 


wore 


mg 



264. 151 (m) . 



(iii) 



An 



operator who uses a letter 
of credit to satifsy the 



requirements 



of 



this 



section 



shall 



also 



establish a standby trust 
fund. Under the terms of 
the letter of credit, all 
payments made thereund er 
shall, in accordance with 



i n struct ions 



from 



the 



B ranch. be deposited by 

the i ssuing instituti on 

directly into the s ta n d by 

trust 

tru 



fund . 



Th is s tan d by 

t f u nd s hall meet t h c 

in Section 



roq uj remen ts 
265. 147(a)(3). 



except 



that : 
a. A n orginallv signed 
duplicate of the trust 



agreement 



shall 



be 



s u b m itte d to the Branch 



with 



the 



letter 



of 



cr e d it ; ci n d 

b. Until th e 
trust 



fund 



standby 



funded 



pursuant 



to 



the 



requirem ents of Sectio n 
2 65. 147(a) (5) (ix), the 



following 



not 



required • 



( 1 ) payment 



into the trust fund as 



NORTH CAROLINA REGISTER 



491 



specified in Sectio n 
265. 147(a)(3)(iii); (ii) 
a nnual valuations as 
required by the tr ust 



agreement 



264. 151 (k) tl ) 



[ see 



Sect ion 



10]; and (iii) notice: 



of 



nonpayment 



required by the trust 



ag ree m ent 



2 64. 151 (k)(l), 



[ see 



Section 



15]. 
(iv) The letter of credit 
shall be accompanied by a 
letter from the ovmer or 



operator 



which 



shall 



state : 

a. The letter of credit 
number ; 

b . The name of the 
issuing institution; 

c. The date of is suance 
of the letter of credit; 

d. The E F A identificati on 

num ber ( s ) of the 

f acil ity ( ies ) : 

e. The name(s) and 



address ( es ) 



of 



the 



fac ility^ ies ) ; and 
f . The amount of funds 
assured by the letter of 
credit ■ 
(v) The letter of credit 
shall be irrevocable and 
sha ll be issued for a 
period of at least one 
year unless at least one 
hundred twenty (120) 
days before the current 
expiration date, the 



issuanq 



inst itut ion 



notifies both the own er 
or operator a n d the 
B ranch by certified mail 
of a decision not to 



extend the 



date. 



exp iration 
Under the terms 



of the letter of credit, 



the one hundr ed 
( 120) days w ill 



t wnty 
begin on 



the date when both the 
ow ner or operator a nd 
the Branch have r ece.i ved 
the notice, ns shown by 



the 



latter 



return 



receipt . 
(vi) The letter 



of credit 



shall be issued in 



amount 



at 



least 



two 



million 



dollars 



($2,000,000), or such 
other amount as required 
by the Branch pursuant 
to Section 265.147(c) or 



(d) . 
(vii) If 



an owner or 



operator 



subst itutes 



other 



financial 



assurance as specified 
in this section for all 
or part of the amount of 
the letter of credit, he 
may submit a writte n 
request to the Branch 



for 



release 



of 



the 



amount of the letter of 
credit in excess of the 



amount 



of 



required 



coveraqe to 


be 


demonstrated by 


the 


letter of credit. 




(viii) Any person who 





obtains final judgment 
or settlement against 
the owner or operator 
for bodily injury and/or 
property damage caused 
by a sudden accidental 

occurrence or 

occurrences arising from 
the operation of the 
facility may request 
payment from the letter 
of credit in 



satisfaction 



of 



the 



judgment: or settlement 
by submitting to the 
Trust ee : 
a . In the case w h ere a 
person has obtained a 



final 



judgment , 



certified copy of the 



judgment 



and 



statement, signed by the 
claima n t's attorney of 
record that the judgment 
was either ( 1 ) rendered 
by the highest court in 
the jurisdiction where 



the 



and 



act i on was brought 
owner or 



the 



operator exhausted all 
rights of appeal, or (2) 
rendered bv the highest 
court which rendered a 
judgment and no appeal 
was made bv the owner or 
operator to a higher 
court within the time 
a llowed by applicable 
statute or rule, or (3) 
a greed to bv the owner 
or operator; or 
b. In the case of a 
s ettlem ent , an 



or igina l ly 



dupl icate 



of 



signe d 
the 



settlement agreement and 
an originally signed 
duplicate of the release 
of all claims. 
( ix ) After receiving the 
material described in 
Section 

265. 147(a)(5)(viii) 
above, the Trustee shall 
notify the Branch of the 
amount of such judgment 
or settlement . The 



Branch 



shalll 



then 



instruct the institution 
issuing the letter of 
credit to pay to the 
Trustee such amounts, 
not to exceed the amount 
of the judgment or 



settlement , 



and 



the 



costs of administering 



492 



NORTH CAROLINA REGISTER 



said fund, or the amo unt 

of the required 

whichever i s 
The Trustee shall 



coverage , 



le« 



Pc-y to the person who 
obta i ned the judgment or 
settle ment 
of 



s u ch amount 



the judgement or 



settlement. but not to 



exceed the 
fund s i n th e 



(x) If th e 
°I>e_rnfj2r 

establish 



own er 

doe 



amou nt 
tru st . 
or 



of 



not 



alternate 



financi a l as s u ranee 
re qui re d by 
and docs 



this section 



not 



obtain 



written approval fro m 
the Branch of any such 

alternate financial 

assura nce within ninety 
(90) days of rec ei pt by 

both the owner or 

operator and by the 
Branch of a notice that 
the issuing institution 



will not 



extend 



the 



letter of credit beyond 
the current expiration 
date, the Branch shall 
draw on the letter of 
credit. The Branch may 
delay drawing on the 
letter of credit if the 



issuing 



institution 



g rants an extension of 
th e term of the letter 
credit . 



of 



During th < 



last thirty (30) days o f 

a ny suc h e xtension, the 

Branch shall draw on the 
letter of credit if the 
owner or operator ha s 



failed 



to 



alternate 



provide 



financial 



assu r ance as specified 
in this section or has 
failed to obtain written 
approval by the Branch 
of such assurance , 
(xi) No letter of credit 



shall 



be 



terminated 



wi thout prior writte n 
consent of the Branch. 
T he Branch may 



the letter of credit 



return 
to 



the issuing institution 
for termination when the 
Branch has determined 



that 



the 



operator has substituted 

a lternat e f inanc ial 

assuran ce as speci f ied 
in this sect ion, or when 



it 



app roves 



the 



certification of clo s'i re 

of the f acil itv 

su b mitted pursuant to 
Section 265. 115." 

(13) Section 265. 147(a) 
is amended by ad dj ng a 
new paragraph (6) to 
read as follows: 

"(6 ) Use of multiple 



financial 



mechanisms . 



An owner or operator may 
demon strate the required 
liability coverage by 
establishing more than 
one financial 
as specified 



m echanism 
in this 



;ect ion . 



These 



mechanisms are United 
t o trust funds. surety 



bonds 



paym ent into 



guaranteeing 



trust 



f u n d. letters of 

a n d i ns urancc . 

nechan i sm 
spe c if ied 
(T) . (3). 



must be 



credit , 
The 

s 



_i n p a r a g r a p h s 
(4). and (5) 



of this section, excep t 
that 



it 
combination 



the 



mcchanjsms. rather than 



the 



single mechanism . 



wh ich 



must 



provide 



financial assurance for 
a n amount at least tw o 



mill ion 



dollars 



($2,000.000) 



If 



an 



owner or operator uses a 
trust fund in 



comb inat ion 



with 



surety bond or a letter 
of credit, he may u se 
the trust fund as the 
standby trust fund for 
the other mechanisms . A 
single standby trust 
fund «'• he established 



for 



two 



or 



more 



mechanism; 



The Branch 



m ay use any and all o f 



the 



mechanisns 



to 



provide 



for 



sudden 



accidental 



occurrences 



liability coverage for 
the facility." 
(14) The following shall 
be sub s tituted for t he 
provisi o ns of 40 CFR 
265. 147(b), which was 



not 



adopted 



Jry. 



reference : 
"(b) Coverage for 

nonsudden accidental 



occurrences . 



An 



or operator of a surface 
impoundment, landfill, 

or land treatnent 

facility which is used 



to 



manage 



hazardous 



waste, or a group of 



such 



facilities. must 



demonstrate 



respo nsibility 
bodi 



financi al 
for 



Llv injury a p jrl 

pro p erty damage to thi rd 



part 
non 



caused 



by 



udden 



ace idental 



occurrences arising from 



operations 



of 



the 



facility or 



group 



of 



f acil it ies . 



The 



or operator must ha" c 
and maintain liability 
coverage for nonsudden 



NORTH CAROLINA REGISTER 



493 



accidental occurrences 
in the amount of at 
least $3 million per 

occurrence with an 

a nnual aggregate of at 



least 



$6 



million , 



exclusive 



of 



defense cost: 



legal 



This 



liability coverage may 

be d emonstrated as 

specified in paragraphs 
(b)(1), (b)(2), (b)(3), 



(b)(4), 



(b)(5), and 



(1 ) 



(b)(6) of this section: 
An owner or operator may 



demonstrate 



the 



required 



liability coverage by having 



liability 



insurance 



specified in this paragraph, 
(i) Each insurance polic y 
must be amended by 



attachment 



of 



the 



Haz ardous Waste Facility 
Liability Endorsement or 
evidenced by a Certificate 
of Liability Insurance, 



The 



wording 



of 



the 



endorsement 



must 



be 



indentical to the wording 

specified in Section 

264.15HJ). The wording 
of the certificate of 

insurance must he 

indentical to the wording 



specified 



Section 



2 64. 151 (.i). The owner or 
operator must submit a 
sianed duplicate origin al 
of the endorsement or the 
certificate of insurance 



to 



the 



Branch . 



If 



requested by the Branch, 
the owner or operator must 
provide a sign e d duplicate 
original of the insurance 



p olicy . 
(~ii) 



Each 



insurance 



policy must be issu e d by 
an insurer wh ic h, at a 



minimum , 



is 1 icensed to 



transact the bu rlines s o f 

insu rance, or el igibl e to 

provide ins uran ce as an 

excess or surplus lines 

i nsurer, in one or more 

States . 

(2) An owner or operator may 

meet the requirements of 

this section by passing a 

financial test or using the 

corporate guarantee for 



liability 



coverage 



as 



specified in paragraphs (f) 
a nd (h) of this section. 
(3) Liability trust f und . 

(i) An owner or operator 



may 



demonstrate 



the 



required 



1 iabil itv 



coverage by establishing 
a nonsudden accidental 



occurrences 



trust 



fund 



conforms 



to 



liahil itv 
whi c h 
the 



requirements of this 



paragraph 



and 



_bv. 



submitting an originally 
signed duplicate of the 
trust agreement to the 



Branch . 



The trustee 



must be an entity which 
has the authority to act 
as a trustee and whose 
trust operations are 
regulated and examined 
by a Federal or State 
agency . 
(ii) The wording of the 
trust agreement must be 



indentical 



to 



the 



wording specified 



in 



Section 264 . 1 5 1 (k) ( 1 ) , 
and the trust agreement 
must be accompanied by a 
formal certification of 



acknowledgment 



[for 



example, see Section 
264.151 (k)(2)1 . 
(iii) On the date of the 
i nitial establishment of 
the nonsudden accidental 

occurrences liability 

trust fund, the value of 
the fund shall be at 



least 



mill ion 



dollars ($6,000,000), or 
such other amount as 
reguired by the Branch 



pursua nt 



to 



Section 



265.147(c) or (d). 
( iv ) If an owner or 

operator subst itutes 



other 



financial 



assurance as specified 
in this section for all 
or part of the nonsudden 
occurrences 



accidental 



liability trust fund, he 



may submit 



written 



request to the Branch 



for 



release 



of 



the 



am ount in the trust fund 

in e xcess of t he am ount 

of the reguired coverage 
to be demonstrated by 
the nonsudden accidental 



occurrences 

trus t fu nd. 

(v) 



1 iability 



Any person who 
obtains final judgment 
or settlement against 
the owner or operator 
for bodily injury and/or 
property damage caused 



bv_ 



nonsudden 



accidental occurrence or 
occurrences arising from 
the operation of the 
facility may request 



payment 



from 



the 



nonsudden 



accidental 



occurrences 
trust _ 



fund 



liability 



satisfaction 



of 



the 



judgment or settleme nt 
by submitting to the 
Trus tee : 
a . In the case where a 



494 



NORTH CAROLINA REGISTER 



pers on 
final 



has o bt aincd 



judgment 



a 
a 



c c rt ifie r l copy of th e 

J u cjrj men t o n d a 

statcmen t , sictnod by the 

cl ai man t's a ttor ney o f 

re cord t hat t h n j u d q ment 

wan cith e r (1 ) rci irlc_rcd 
by the highest court i n 
the jurisdiction where 
the action was brough t 

and the owner px 

operator exhausted all 
rights of appeal, or (2) 
rendered by the highest 
court which rendered a 
judgment and no appeal 
was made by the owner or 
operator to a higher 
court within the time 
allowed by applicable 
statute or rule, or (3) 
agreed to by the owner 
or operator; or 
b. In the case of a 

settl ement , an 

ori g_i nally sig ned 

d u JD 1 i cate of the 

settlement agreement and 

an origin ally si g ned 
jf the release 



d upl i rate 

of all claims . 

(vi) After receiving the 
m aterial described in 
Section 265. 147(b)(3)(v) 
above, the Trustee shall 
pay to the person who 
obtained the judgment or 
settlement such anount 
of the ju dg ment or 
settlement, but not to 
exceed the anount of the 
funds in the trust . 

(vii) No trust shall be 
terminated without prior 
written consent of the 
Branch . The Branch ma y 
agree to termination of 
the trust when it h a s 

determined t hat the 

owner or operator h.^ s 

su bstituted alternat e 

financial assurance as 
s pecified in thi s 



section 



or when it 



approves 



the 



certification of closu re 

of the facility 

submitted p u rsuant to 
Section 265.1 15." 
(15) Section 265. 147(b) 

is amended by adding a 
new paragraph (4) to 
read as follows: 
"(4) Surety bond 

guaranteei n g payment into 

a nonsudden 



occurrence s 



trust fund 

( i ) An ow n er o r 



accidental 
1 iability 



may 



operato r 
demonstrate the 



required cove r age 



bv 



i. *.: : n u -L J. u L A L I' V ' :i. t in i^ u y 

obtaining a surety bo nd 
which conforms to the 



regui rem ents of thi s 



pnrngrnnh 



and 



by. 



subm itting the su rety 

he n d to t h e Branch _. 1 1 1 c 

s i i rety c ompj i ny i § r. u i ii cj 

the bont I m u st , a t a 

mini mu m. bo am on g tho se 

listed 

sureties 



as acc e ptable 
on Federal 



bonds in Circular 570 of 
the U.S. Department of 
Treasury . 
(ii) The wording of the 



surety bond must 



be 



indent ical 



to 



the 



wording specified in 
Section 264.151 (1 ) . 
(iii) The owner of 

operator who uses a 
surety bond to satisfy 

the requ irements of 

Section 265.147(b) shall 
also establish a standby 

trust fund . Under the 

terms of the surety 
bo n d, a l l pa ymen ts made 
thereu nd or sha ll, i n 



ac cord a n cc 
i n struct ion; 



from 



with 
the 



B ran ch be d eposi ted by 
the surety directly into 
the standby trust fund . 
This standby trust shall 
meet the requirements in 
Section 265.147(b)(3), 
exce pt that : 
a. An originally signed 
duplicate of the trust 



agreement 



shall 



be 



submitted to the Branch 
with the surety bond; 
and 
b. Until the standby 
tru st fund i s funded 



pursuant 



to 



the 



requi rements of Section 
265. 147 ( b)(4)(iv), the 



following 



not 



required 



( i ) payment 



int o the trust fund as 
specifie d in sectio n 
265. 147(b)(3)(iii); (ii) 



annual 



valuat ions 



required by the trust 



ircement 



[ see 



264. 151 (k)(l) 



Sect ion 



10]; and (iii) notices 

of nonpayment as 

required by the trust 

a greeme nt [ see 

264. 151 (k)(l) Section 
15]. 
( iv ) The bond shall 

guarantee that the owner 
or operator shall : 
a. Fund the standby trust 
fund in an amount equal 
to either the sum of the 
judgme nt or settlement 
described j n Section 



265. 147(b)(4)(vii) 



the 



costs 



and 
of 



administering said fund, 
or the amount of the 



NORTH CAROLINA REGISTER 



495 



penal sum, whichever is 
less, within fifteen 
(15) days after the 



Branch or 



court of 



competent 
issues an 



jurisdict ion 
order to that 



effect; or 
b . Provide alternate 
financial assurance as 



specified 



in 



this 



section, and obtained 



the 



Branch' s 



written 



approval 



of 



the 



assurance 



provi d ed, 



within ninety (90) days 
after receipt by both 
the owner or operator 
and by the Branch of a 
notice of cancellation 
of the surety bond from 
the surety . 

(v) Under the terms of 
the bond, the surety 
shall become liable on 
the bond obligation when 
the owner or operator 
does not perform as 
guaranteed by the bond . 

(vi) The penal sum of the 
bond shall be at least 



sax 



mil] ion 



dollars 



($6,000,000), or such 
other amount as requi red 
by the Bra n ch pu rsuant 
to Section 265.147(c) or 
(d). 
(vii) If an owner or 

operator s ub st it ute s 

other fin a n c ia 1 

ass.u ran ee as snocii iod 

i n tli i s s e ctdo n tor all 
o r part of the si i retv 
bond, he nay su b mit a 
writ h en requ es t to th e 
B ranch for release of 
the amount of the penal 



of the 



bond 



excess of the amount of 
the required coverage to 
be demonstrated by the 
surety bond . 
(viii) Any person who 

obtains final judgment 
or settlement agianst 
t he owner or operator 
for bodily injury and/or 
property damage caused 

by a non sudde n 

accidental occurrence or 
occurrences arising from 
the operation of the 
facility may request 
payme n t from the s u rety 
b ond in s a t i r. i net j on of 



the 



judgm ent 



settl eme nt by s ubmitt ing 

to the Tr ust ee : 
a. Tn the case w h e re a 
p erson has obtai n ed a 



final 



.jud gm ent , 



certified copy of the 



.judgment 



and 



statement, signed by the 
claimant's attorney of 



record that the .judgment 
was either ( 1 ) rendered 
by the highest court in 
the jurisdiction wher e 
the action was brought 



and 



the 



operator exhausted all 
rights of appeal, or (2) 
rendered by the highest 
court which rendered a 
judgment and no appeal 
was made by the owner or 



operator to 



higher 



court within the ti me 
allowed by applicable 
statute or rule, or (3) 
agreed to by the owner 
or operator; or 
b. In the case of a 
settle me nt , 



originally 



signed 



duplicate 



of 



the 



settlement agreement and 
a n originally signed 
duplicate of the release 
of all claims . 
( ix ) After receiving the 
material described in 
Secti on 

265. 147(v)(4)(viii) 
above, the Trustee shall 
notify the Branch of the 
amount of such judgment 



or settlement . 



The 



Branch 



shall 



then 



instruct the owner or 
operator to pay to the 



t rustee su c h 



amounts 



not to exceed the 



o f t ho iu dqji ent 



amount 

or 



settlement an d the costs 
of ad mini stering sa id 
fund, or the amount of 
the reguired coverage, 



ler 



If 



w hichever is 

the owner or operator 

fails to perform as 



reguired by the Branch's 
instructions, the Branch 

shall instruct the 

surety to place funds in 
th e amount guaranteed 
for the f acilityt ies ) 
i nto the standby trust 
fund. The trustee shall 
pay to the person who 
obtained the judgment or 
settle ment such amount 
of t h e judgment or 
settlement, but not to 
exceed the amount of the 

fun ds in t he trust . 

(x) Under the terms of 
the bond, the surety may 



cancel 



the 



bond 



JiY 



sendin g written notic e 



of 



J2Y 



c ancell a tion 

certified mail to the 
(inner or operator and to 



the 



Branch . 



Cancellation 



take 
tint j] 



may 



not 



effect, however, 



at 



least 



hundred twenty (120) 



496 



NORTH CAROLINA REGISTER 



d ays after the date of 
receipt of the notice of 
cance llation by botli the 
owner or operator and 
the Branch, as shown by 



the 



latter 



return 



r eceipt . 
( x i ) N o bond shall be 

ca ncelled without pr ior 
written consent of the 

Bra nch . H i e B n nch ma y 

agree to cancel lat i on o^f 

th e lion d whe n it h n s 

d etc r mi n od that 

own or ov 



t_ho 
ins 



substituted 



lern t or 

alternate 



financial 


assurance as 


spec if icd 


in this 


sect ion , 


or when it 



approves 



the 



certification of closure 

of the f acil ity 

submitted pu r suant to 
Section 265. 115." 
(16) Section 265.147(b) is 

amended by adding a new 

paragraph (5) to read as 

follows : 

"(5) Letter of credit. 

(i) An owner or operat or 



may 



demonstrate 



the 



required coverage b y 
obtai n ing an ir revoc a ble 
let t er of credit which 

ennformr 



re qu irom ont ? 
p_a r a g r a p h 



to 

of. 

and 



this 



siibrn i tting th e letter t o 

the Bra n c h . The issi \j n g 

in stitution shall he a n 
entity which has_ the 



authority 



to 



issue 



letters of credit a nd 
whose letter of credit 
o perations are regulated 

and examined by a 

F ederal or State age n cy, 
(ii) The wording of th e 



letter of 



be 



indent ical 



credi t shall 
to the 



word inq specified 
Section 264. 151 <m) , 
(iii) An own e r or 

who use 



ope rator 



letter of credit 



to 



satisfy the requ i rement s 
of this section shal l 
also establish a stand by 

trust fund . Un der the 

ter ms of the letter of 
credit, all pay ments 
ma de thereunder sha ll, 

in accordance with 

i nstructions from the 
Branch, be deposited by 
the issuing institut ion 



directly 



into 



the 



standby 



trust 



fund . 



This standby trust fu nd 



shall 



meet 



the 



req uirements in Sectio n 



265. 147(b)(3), 



except 



that 
a. An originally signed 



duplicate of the trust 

ag reement s hall be 

su b m itt e d to the Branch 
with the letter of 
cre d it ; a nd 
b. U n til the standby 
t rust fund is fund e d 



pursua"t 



to 



the 



rcqui re m ents 



of 



are 



not 



26 5. 147(b) (5) ( ix ) , th e 

f oll owi ii(| 

rcqui red: 

into _t 1 i e tri l s_t 

spec i t i<>d in 

;'(.') .147(h) (3 )1 iii ) 
annual 



( 1 ) n ayme n t 

fund as 

Sect ion 

iLiil 

as 



re quired by 



vain at ion 
the _ 



trust 



agree ment 



[ see 



264.151 (k)(l) 



Sect ion 



101; and (iii) notices 

of nonpayment a^s 

required by the trust 



agreement 



264. 151 (k)(l) 



[see 



Sect ion 



' iv ) The letter of credit 
sha ll be accompanied by 
a letter from the owner 
or operator which shall 
sta te : 

a. The letter of credit 
number : 

b. The name of th e 
is su ing in stituti on; 

c . Th e da to o f is sua nce 

of the 1 ctter of cred it; 

d . The EPA identification 



number I s ) 



of 



the 



la c i 1 i t y ( i c s ) ; 
e . T l le n a me ( s ) an d 
address ( es ) of 



the 



f acil ity ( ies ) ; and 
f . The a rr ount of funds 
assured by the letter of 
cre d it ■ 
(v) The letter of credit 
sha 1 1 be irrevocable a nd 
shal 1 be issued for a 
peri od of at least one 

year un less at least o ne 

hun dred twenty (120) 
days b e fore the curre nt 
expi ration date, the 

issu j ng inst itut ion 

notifies both the owner 



■>nd_ 



the 



or operator 

Branch by certified mail 



of 



decision not to 



e xtend the expii'atio n 
d ate. U nd er the terms of 
the letber o f credit , 



the 



n e hundred a nd 

twenty (120) days will 
begin on the date when 



both 



the 



owner 



or 



operator and the Branch 



have 



received 



the 



notice, as shown by the 
latter return receipt . 
(vi) The letter of credit 
s hall be issued in an 



amount 



at 



least six 



million 



dollars 



($6,000,000), 



or such 



NORTH CAROLINA REGISTER 



497 



other amount as required 
by the Branch p u rsuant 
to Section 265.1471c) or 
(d) . 
(vii) If an owner or 



operator 



substitutes 



other 



financial 



assurance as specified 
in this section for all 
or part of the amount of 
the letter of credit, he 
may submit a written 
request to the Branch 



for 



release 



of the 



amount of the letter of 
credit in excess of the 



amount 



of 



required 



coverage 



to 



be 



demonstrated 



hy_ 



the 



letter of credit , 
(viii) Any person who 

obtains final judgment 



or settlement against 
the owner or operator 
for bodily injury and/or 
property damage caused 

by a non sudden 

accidental occurr en ce or 
occurrences aris i ng fro m 
the operation of the 
facility mav request 
pa yment from the letter 



of 



credit 



satisfaction 



of 



the 



.judgment or settlement 



by submitting to 



the 



Trustee : 
a. In the case where a 
p erson hr.s obtained a 



final 



judgment , 



certified copy of the 



judgment 



and 



statement, signed by the 
claimant's attorney of 
record that the judgment 
was either ( 1 ) rendered 
court in 
where 



by the highest 

the jurisdiction 

the act ion was brought" 



and 



the 



oper ator ex hau sted a 11. 

vi gh ts of a ppe a 1_, o r ( 2 ) 

ren dered by t h e h i_ghej.jt 

£ SJ l rt w hich rcn del -<-d a 

.jud gm ent and no np pca 1 
was made by the owner or 



operator to 



higher 



court within the tim e 
allowed by applica ble 
statute or rule, or (3) 
anreed to by the owner 
or operator; or 
b. In the case of a 
settlement , an 



originally 



sioned 



duplicate 



of 



the 



settlement agreement and 
an originally signed 
duplicate of the release 
of all claims. 
( ix ) After receiving the 
material described in 
Section 
265. 147(b)(5)(viii) 



above, the Trustee shall 
notify the Branch of the 
amount of such judgment 
or settlement . The 



Branch 



shall 



then 



instruct the institution 
issuing the letter of 
credit to pay to the 
Trustee such amounts, 
not to exceed the amount 
of the judgment or 
settle m ent and the costs 
of administering said 
fund, or the amount of 
the required coverage, 
whichever is less. The 



Trustee shall pay to the 
person who obtained the 
judgment or settlement 
such amount of the 
judgment or settlement, 
but not to exceed the 
amount of funds in the 



trust . 
(x) If the owner or 
operato r does 



not 



establish 



alternate 



financial assurance as 
required by this sectio n 
and does not obtain 
written approval from 
the Branch of any such 

alternate financial 

assur ance within ninety 
(90) days of receipt by 



both 



the 



operator and by the 
Branch of a notice that 
the issu i ng institution 



will 



not 



extend the 



letter of credit beyond 
the current expiration 
date, the Branch shall 
draw on the letter of 
credit ■ The Branch may 
delay drawing on the 
letter of credit if the 

issuing institution 

g rants an extension of 
the term of the lette r 
of credit . 



Du ring th e 
la st thi r ty (3 0) days of 

any suc h cxtR nsion, t lie 

Bra n ch r . 1 1 a 11 draw on 1 1 1 o 

letter of credit it the 
owner or operator has 
failed to provide 



alternate 



financial 



assurance as specified 
in this section or has 
failed to obtain written 
a pproval by the Branch 
of such assurance, 
(xi) No letter of credit 



shall 



be 



terminated 



without prior written 
consent of the Branch. 
The Branch may return 
the letter of credit to 

issui ng i nstitution for 

termination when the 
Branch lias determined 



that 



the 



operator has substituted 



498 



NORTH CAROLINA REGISTER 



alternate 



financial 



assurance as 


speci 


f ied 


in 


th 


is section , or 


when 


it 




approv 


o s 


the 


CCl 


ti 


f icat ion 


of clo 


sm-c 


of 




the 


fnc i 


lit V 



sj i b m_i ttod 

Section 265 



115." 



(17) Section 265.147 (b) is 
amended by adding a 

pn ragra ph (G) to read 



new 
ns 



follows : 

"(6 ) U se of mult i n le 

financial mechanis e s. A n 
owner . .... or operator may 



demonstrate 
1 iabilitv 



the required 
coverag e by 



estahl ishincr more than on e 
financial mechanism a s 
specified in this section. 

These mechanisms are 

limited to trust funds, 
surety bonds guaranteeing 
payment into a trust fund, 
letters of credit, a nd 
insurance. The me c hanisms 
must be as specified in 



paraarat) 


hs 


(1), 


(3) , 


(4). 


and (5) 


of 


this 


sect 


i on . 


except 


tha 


t it 


is 


the 


combinat 


ion 





f 


the 



median isms 



the single 



which 



fina n cial 
amount 



rather 1 1 1 a n 
mec ha nirm 

must p rovide 

as surance f or a n 

six 



at 



least 



mill ion 



dollar; 



($6.000,000). If an owner 
or operator uses a trust 
fund in combination with a 
sure t y bond or a letter of 
credit, he may use the 
trust fund as the standby 
trust fund for the other 



mechanisms , 



single 



standby trust fund may 
established for two 



be 

or 



mechanisms . 



The 



Branch may use any and all 
of the mechanisms to 



provi de 



for 



sudden 



accidental 



occurrencer 



liability coverage for the 

facility." 
(18) Section 265.147 is 

amended by adding a new 
paragraph (h) to read as 



fol low 

"(h) Corporate gu a rantee 
for liab i l ity coverag e _;_ 



( 1 ) Subject to parag raph 

(2), an owner or operator 
m ay meet the requirements 



of 



this 



section 



by 



obtaining 



written 



guarantee 



hereafter 



referred to as "corporate 



guarantee 



The guarantor 



must 



be 



the 



parent 



corporation of the owner 
or operator as defined in 



Section 265.140(d). 



The 



guarantor must meet the 
requirements for owners or 



oper ators in paragraph s 
(f)(1) through (7) of this 
s e ction. T h e wor ding of 
the corporate guarante e 

mil r.t be identica l to t ho 

word ing specified i n 

S e c t i o n 264 . 15 I ( n j. A 



cert i f ied 



_CPJP_Y_ 



of 



the 



corporate 


guarant ec 


must 


accompany 


the items 


sent 



t o th e Branc h as s pec if ie d 
i n paragraph (f)(3) of 
th is Section. The terms 
of the corporate guarantee 
must p rovi de that : 
(i) If the owner or 

operator fails to 

satisfy a judgment based 
on a determination of 
liability for bodily 
injury and/or property 
damage caused by sudden 
or nonsudden accidental 
o ccurences (or both, as 
the case may be ) , 



arising 



from 



the 



operation of facilities 

covered bv this 

c orporate guarantee, o r 
fails to pay an amou nt 
a gree d to in settlem ent 
of cl aims arisi net from 
or a lleq ed to ri s e from 
su ch injury or damage, 
t he g uara ntor will do so 

up to the li m its of 

cove rage . 
(ii) Hie corporate 

gua rantee will remain in 
force unless the 



gu arantor sends notic e 

of cancellation by 

certified mail to th e 
ow ner or operator and to 

the Branch . This 

guarantee may not he 
terminated unless and 



unt il 



the 



Branch 



approves 



alternate 



liability 



coverage 



complyi ng with Section 
264. 147 and/or 265. 147. 
(2) A corporate guarantee 
may be used to satisfy the 

requirements of this 

section if it is a legally 

valid and enforceable 

o bi i ga t ion in the State of 
No rth Caro li na." 
(19) S ection 26 5. 147 is 

am e nded by adding a new 
para graph (i) to read as 
fol lows : 

"(i) Notice of claim. 

The owner or operator of 
each facility shall give 
written notice to the 



Branch 



from 



bodily 



every claim 



injury 



and/or property damage 
caused by a sudden 



and/or 



nonsudden 



accidental occurrence or 
occurrences arising from 



NORTH CAROLINA REGISTER 



499 



the operation of the 



f acilityt ies ) . 



The 



owner or operator of 
each facility shall give 
such notice to the 

Branch as soon as 

a ny 

than 



possible and i n 



event 



later 



thirty (30) days after 
learning of such claim . 
The owner or operator of 
each facility shall give 
written notice to the 
Branch of every judgment 
against the owner or 



operator 



for bodily 



injury 
damage 



and/or property 
caused by a 



sudden 



or 



nonsudden 



accidental occurrence or 
occurrences arising fro m 
the operation of the 



f acil ity( ies ) . 



The 



or operator of 
each facility sh a ll give 
such notice to th e 

Branch as soon as 

possible and in any 



event 



later than 



thirty (30) days after 



learning 



of 



said 



judgment . The owner or 



operator 



of 



each 



facility shall submit to 
the Branch a copy of 
every judgment against 
the owner or operator 
for bodily injury a n d/or 
property damage ca u s ed 



by_ 



sudden 



and/or 



nonsudden 



accidental 



occurrence 



occurrences arising f om 
the operation of the 



f acil ity ( ies ) . 



The 



owner or operator o f 



each 



f acil ity shall 



submit a copy of s uch 
judgment to the Branch 
as soon as possible and 
in any event no later 
than thirty (30) days 
after receiving a copy 
t hereof . " 
(20) Section 265. 147 is 

amended by adding a new 



paragraph (j) to read as 
f ollows : 
"(j) Continuous coverage. 
An ow n er or operator mus t 



continuously 



p rovid e 



liabil ity covera ge for 



facility as required by this 
section until notifi e d that 
he is no longe r regui r ed t o 
ma j ntain liabi lity coverage 
for t hat f acjLLi JLY ill 



accordance 



with 



26b. 147(e) . If the owner 
operator fails 



submit 



evidence 



of 



liability 



coverage as required 



Section 



265. 147 



by 



and 



to 



obtain 



from 



the 



Branch 



approval of such coverage 
before the expiration of the 
current liability coverage, 
the owner or operator shall 
c ease treatment, storage, or 
d isposal of hazardous waste 

at the facility until 

liability c overage is 

demonstrated to and approved 
by the Branch . " 
(j) The provisions for "Tanks" 
contained in 45 Fed. Reg. 
33,244 and 33.245 (1930) [to be 
codified in 40 CFR 265.190 to 
26 5 .201 (Subpart J)] have been 
adopted by reference as amended 
by 46 Fed. Reg. 2,896 and 
35,249 (1981); and 51 Fed. Reg. 
2 5,478 to 25,485 and 25,479 to 
25,481 (1986). 

.0034 INTERIM STATUS STANDARDS 
FOR PERMITTING - PART 270 

(b) The following provisions 
for additional permitting 
requirements contained in 48 
Fed. Reg. 14,233 to 14,241, and 
30,114 (1983) [to be codified in 
40 CFR 270 (Subpart B, Permit 
Application)] have been adopted 
by reference as amended by 48 
Fed. Reg. 39,622 (1983); 50 Fed. 
Reg. 2006, 28,751, and 28,752 
(1985); and 51 Fed. Reg. 10,176, 
ami 16,458 , and 25,486 (1986). 

(c) The following provisions 
for additional permitting 
requirements contained in 48 
Fed. Reg. 14,241 to 14,243 and 
30,114 (1983) to be added [to be 
codified in 40 CFR 270 (Subpart 
C, Permit Conditions)] have been 
adopted by reference as amended 
by 48 Fed. Reg. 39,622 (1983); 
ami 50 Fed. Reg. 28,752 (1985) £ 
an d 51 Fed. Re g. 25,486 (1986). 

(d) The following provisions 
for additional permitting 
requirements contained in 48 
Fed. Reg. 14,243 to 14,245 and 
30,114 (1983) to be added [to 
be codified in 40 CFR 270 
(Subpart D, Changes to Permit)] 
have been adopted by reference 
as amended by 50 Fed. Reg. 
28,752 (1985) ; and 51 Fed. 
Reg. 16,458. 

(g) The following provisions 
for additional permitting 
requirements contained in 48 
Fed. Reg. 14,248 (1983) [to be 
codified in 40 CFR 270 (Subpart 
G, Interim Status)] have been 
adopted by reference as amended 
bv 49 Fed. Reg. 17,718 (1984); 
arrd 50 Fed. Reg. 28,753 (1985); 

and 51 Fed. Reg. 16,459 x and 

25,486 (1986). 
date "November 
contained in 40 
shall be deleted 
with the date 
1986" . 



However , the 

8, 1985" 

CFR 270.73(c) 

and replaced 

"January 1 , 



500 



NORTH CAROLINA REGISTER 



.0041 REQUIREMENTS; HAZARDOUS 
WASTE PROGRAM - PART 271 
The following provisions 
for the sharing of information 
[to be codified in 40 CFR 271.1 
to 271.17] have been adopted by 
reference as amended by 50 Fed. 
Reg. 28,754 (1985) and 51 Fed. 
Reg. 10,176 and 25,486 (1986). 



Notice is hereby given in 
accordance with 6.S. 150B-12 
that the Division of Medical 
Assistance intends to amend 
regulations cited as 10 NCAC 26D 
.0014 (a) & (d) . 

The proposed effective date of 
this action is February 1, 1987. 

Statutory Authority: G.S. 
108A-25(b); 108A-62; Chapter 
1014, 1985 Session Laws, 2nd 
Session 1986. 

The public hearing will be 
conducted at 1:30 pm on November 
14, 1986 at North Carolina 
Division of Medical Assistance. 
1985 Umstead Drive, Raleigh, NC 
27603, Room 201 . 

Comment Procedures: Written 
comments concerning this 
amendment must be submitted by 
November 14, 1986 to Director, 
Division of Medical Assistance. 
1985 Umstead Drive, Raleigh, NC 
27603. Oral comments may be 
presented at the hearing. 

CHAPTER 26 - MEDICAL SERVICES 

SUBCHAPTER 26D - LIMITATION ON 
AMOUNT; DURATION: AND SCOPE 

.0014 THERAPEUTIC LEAVE 
(a) Each Medicaid eligible 
patient who is occupying a 
skilled nursing (SNF) or 
intermediate care (ICF or 
ICF-MR) bed for which the North 
Carolina Medicaid Program is 
then paying reimbursement shall 
be entitled to take up to +8- 60 
days of therapeutic leave in any 
12-month period from any such 
bed without the facility in 
bed is located 
any loss of 
during the period 



which the 
suffering 
reimbursement 
of leave. 

■fd-> Pri o r approval frrr trrry 
therapeut ic 1 e ave nttns fc be 
o b t ain e d -from "Hre S-ba-tre or i-trs 
ag e n t pri or ±-o t+re b e ginnin g o-f 
■the -i n te nd e d abse nce . 

(d) No more than 14 



Notice is hereby given in 
accordance with G.S. 150B-12 
that the Division of Medical 
Assistance intends to adopt 
rcqulation cited as 10 NCAC 26H 
.0507. 

The proposed effective date of 
this action is February 1, 1987. 

Statutory Authority: G.S. 
108A-25(b); 108A-54; 108A-55; 
P.L. 93-369; P.L. 99-272; 42 
C.F.R. 447. 10 & 447.342. 

The public hearing will be 
conducted at 1 :30 pm on November 
14, 1986 at North Carolina 
Division of Medical Assistance, 
1985 Umstead Drive, Raleigh, NC 
27603. Room 20 1 . 

Comment Procedures: Written 
comnents concerning this 
amendment must be submitted by 
November 14, 1986, to Director, 
Division of Medical Assistance, 
1985 Umstead Drive, Raleigh, NC 
27603. Oral comments may be 
presented at the hearing. 

SUBCHAPTER 26H - REIMBURSEMENT 
PLANS 

SECTION .0500 - REIMBURSEMENT 
FOR SERVICES 

.0507 INDEPENDENT LABORATORY 
SERVICES 

Fees for independent 
laboratory services shall be set 
based on the following in the 
stated order of precedence: 

(1) Title XVIII maximum fee. 
This will be used when 
available . 

(2) The 75th percentile of 
charges from the calendar 
year 1979. This will be used 
when (1) is not available. 

(3) A rate established by the 
state agency based on current 
charges . This will be used 
when neither (1) nor (2) is 
available . 

These maximum rates shall also 
apply to laboratory services 
paid to hospital outpatient 
facilities, physicians, and any 
other provider supplying 
outpatient laboratory services. 



TITLE 1 1 



INSURANCE 



consecut ive 




therapeut 


ic 


leave 


davs mav 




be taken 




with 


out 


approval o 


f 


the Div 


ision 


of 



Medical Assistance 



Notice is hereby given in 
accordance with G.S. 150B-12 
that the Department of Insurance 
intends to amend regulation 
cited as 11 NCAC 10 .0304(6) and 
adopt 11 NCAC 10 .0312. 

The proposed effective date of 
this action is February 1, 1987. 



NORTH CAROLINA REGISTER 



501 



Statutory Authority: 
58-480(e)(14). 



G.S. 



the 



the 
the 



The public hearing will be 
conducted at 10:00 a.m. on 
November 17, 1986 at the Hearing 
Room. Third Floor, Dobbs 
Building, 430 North Salisbury 
Street, Raleigh, North Carolina. 

Comment Procedures: Written 
comments may be sent to Roger 
Langley, P. 0. Box 26387, 
Raleigh, N.C. 27611. Mr. 
Langley may be contacted by 
calling (919) 733-3368. 

CHAPTER 10 - FIRE AND CASUALTY 
DIVISION 

SECTION .0300 - POLICY FORMS: 
RULES AND RATE FILINGS 

.0304 PROHIBITED POLICY 
PROVISIONS 

Policy forms will be 
disapproved if they contain any 
of the following kind of policy 
provisions : 

(1) a provision that the 
application is a 
consideration of coverage; 
unless the application is 
physically attached to 
policy; or 

(2) a provision that the 
rules or bylaws of 
company are a part of 
contract; unless such rules 
or bylaws are actually 
written into or attached to 
the policy; 

(3) a provision that a portion 
of the premium becomes due 
and payable only after the 
occurrence of a loss, for 
example, a premium retention 
policy; 

(4) a provision in a liability 
policy that relievos the 
company of liability on 
account of insolvency of the 
insured; 

(5) a provision that knowledge 
of the agent is not binding 
on the company; 

■f6-> provision -irt a liabili t y 
p o licy avoiding p aymen t o-f 
puni t iv e or e xemplary damag e s 
on behalf o-f art insured ; 
-(-?-> (6 ) a provision purporting 
to limit to less than three 
years any suit on the 
contract by the policyholder. 
[NCID Reg. #1 , 7, 16] 

.0312 ADDITIONAL INFORMATION 
In addition to the information 
that must be submitted to comply 
with the provisions of G.S. 
50-i80(d) and (c), the following 
information must bo submitted: 
( 1 ) Forms 
(a) A description of the 



line(s) and/or type(s) of 
insurance affected the form 
filing . 
Cb) A list of states where 
this filing has been made. 

(c) Action taken by 
domiciliary state if form 
has been filed in that 
state . 

(d) A list of states that 
have approved this filing. 

(e) A list of states that 
have disapproved this filing 
and reasons for disapproval. 

(f) A list of states that 
have required modifications 
resulting in approval . 

(g) Copies of all required 
modifications referred to in 
(f ) . 

(h) If the filing is 

identical to a filing made 
with the Department of 
Insurance by a licensed 
rating organization, give 
the name of the licensed 
rating organization and its 
filing designation (N.C. 
Department of Insurance file 
number, date approved, 
reference number, filing 
date , etc . ) . 

(i) If the filing is similar 
to a filing made with the 
Department of Insurance by a 
licensed rating 

organization, give the name 
of the licensed rating 
organization, its filing 
designation, (N.C. 

Department of Insurance file 
number, date approved, 
reference number, filing 
date, etc.) and describe the 
differences between your 
forms and those of the 
licensed rating 

organization . 

(j) Computer printed 

declarations pages should be 
completed in "John Doe" 
fashion . 

(k) Proposed effective date 
of the filing. 

(1) A certification of the 
accuracy of the filing by an 
officer of the company or 
head of the filings 
department . 
(2) Rates 

(a) A description of the 
line(s) and/or type(s) of 
insurance affected by this 
rate/rule filing. 

(b) The program title of the 
filing where applicable. 

(c) The purpose of the 
f il ing . 

(d) Whether the rates being 
filed will be used for 
occurrence or claims made 
pol icies . 

(e) The company or bureau's 



502 



NORTH CAROLINA REGISTER 



approximate market share in 
North Carolina for this line 
of insurance. 

(f) The estimated total 
dollar impact of the filing 
upon the company or bureau's 
N. C. policyholders. 

(g) Whether and N. C. 
policyholder will receive a 
premium increase as a result 
of the filing . 

(h) Affiliation with any 

licensed rating organization 
or advisory organization and 
whether filing is for a 
deviation . 

(i) Minimum requirements for 
eligibility for the 
deviation . 

( j ) Description of other 

restrictions that apply to 
the deviation. 

(k) Where the company or 

bureau has a schedule rating 
plan approved by the 
Department of Insurance for 
the line(s) and/or type(s) 
of insurance affected by the 
rate filing, a statement as 
to whether the company or 
bureau permits both the 
schedule rating plan and the 
"across the board" deviation 
to be applied to the same 
risk . 

(1) Countrywide experience - 
Countrywide written premium, 
earned premium, incurred 
losses and loss ratio for 
each of the last five years 
separately . 

(m) North Carolina experience 
North Carolina written 
premium, earned premium, 
incurred losses and loss 
ratio for each of the last 
five years separately. 

(n) A list of the number of 
N. C. polices (exposure 
units) written in each of 
the last five years with the 
percentage of change from 
one year to the next . 

(o) A countrywide expense 
exhibit 

(p) A North Carolina expense 
exhibit 

Cq) A rate change history for 
the last five years, 
including the effective date 
and amount (percentage 
change) of each change . 

(r) A side-by-side or summary 
comparison of current rates 
to proposed rates. 

(s) Proposed effective date. 

(t) A certification of the 
accuracy of the filing by an 
officer of the company or 
head of the filings 
department . 



Notice is hereby given in 



accordance with G.S. 150B-12 
that the Department of Insurance 
intends to adopt regulations 
cited as 11 NCAC 11H .0101 
through .0305. 

The proposed effective date of 
this action is February 1, 1987. 



Statutory Authority: 

97-93. 



G.S. 



The public hearing will be 
conducted at 2:00 p.m. on 
November 17, 1906 at 430 North 
Salisbury Street, Hearing Room, 
Third Floor. Dobbs Building, 
Raleigh, North Carolina 27611. 

Comment Procedures: Written 
comments may be sent to Dick 
Fields, P. 0. Box 26387, 
Raleigh, North Carolina 27611. 
Mr. Fields may be contacted by 
calling (919) 733-5631 . 



CHAPTER 1 1 



- COMPANY OPERATIONS 
DIVISION 



SUBCHAPTER 11H - WORKERS' 
COMPENSATION SELF-INSURERS 

SECTION .0100 - DEFINITIONS AND 
GENERAL PROVISIONS 

.0101 DEFINITIONS 

When used in this Regulation, 
the following words or terms 
shall have the meaning as 
described in this Section. 

(1) "Act" - The Workers' 
Compensation Act, Chapter 97 
of the North Carolina General 
Statutes, as amended. 

(2) "Department" - The North 
Carolina Department of 
Insurance . 

(3) "Commissioner" - The 
North Carolina Commissioner 
of Insurance . 

(4) "Loss Fund" - That 
portion of net or standard 
premium, exclusive of past 
due balances deemed 
delinquent, covering the 
retention of liability for a 
self-insurer, under the terms 
of an aggregate excess 
insurance contract . In the 
absence of an aggregate 
excess policy, it is that 
portion of net or standard 
premium, exclusive of past 
due balances deemed 
delinquent, allocated to pay 
claims . 

(5) "Trustees" - The 
governing body of a fund 
electjd by its members for 
stated terms of office, to 
direct the administration of 
a fund, and whose duties 
shall include responsibility 
for approving applications 



NORTH CAROLINA REGISTER 



503 



for new members of such fund. 
The majority of such trustees 
must be members of the fund, 
but a trustee shall not be an 
owner, officer or employee of 
a service company. They may 
delegate ministerial 

authority for membership 
approval to such person as 
they select, provided that 
person is not an owner, 
officer or employee of any 
service company. 

(6) "Trustees' Fund" - Any 
monetary fund under the 
control of the board of 
trustees of a fund which is 
not part of the loss fund or 
which is not set aside to pay 
claims . 

(7) "Manual Premium" - 
Premium determined by 
multiplying annualized 
payroll amount segregated 
into the proper Workers' 
Compensation job 
classifications by the 
applicable manual premium 
rates approved for use in the 
State of North Carolina. 

(8) "Fund" - A group self- 
insurers fund. 

(9) "Fund Year" - That 
elected period of coverage, 
up to 12 months in duration, 
pursuant to which a group 
self-insurer extends coverage 
to its members . A fund year 
shall be considered "open" as 
long as one claim remains 
outstanding but in any event 
shall remain open not less 
than three years from the 
beginning of the fund year. 

(10) "Certified Audit" - An 
audit upon which an auditor 
duly qualified to practice as 
a public accountant or 
certified public accountant 
expresses his professional 
opinion that the accompanying 
statements present fairly the 
financial position of the 
employer, corporation, or 
entity if an individual 
self-insurer, or of the fund 
if a group self-insurer, in 
conformity with generally 
accepted accounting 
procedures as considered 
necessary by the auditor in 
the circumstances. 
Statements presented shall , 
in the minimum, consist of a 
balance sheet, profit and 
loss statement and a 
statement of change in fund 
position . 

(11) "Service Company" - A 
business which has contracted 
with one or more 
self-insurers for the purpose 
of providing any or all 
services necessary to plan 



and maintain an approved 
self-insurance program. The 
term "Service Agent" is 
synonymous with the term 
"Service Company" as used in 
this Regulation. 

(12) "Net Safety Factor" - Any 
amount needed in a given fund 
year in addition to current 
loss reserves to fund future 
loss development. 

(13) "Loss Development" - The 
change in incurred loss 
values from one point in time 
to another . 

(14) "Conditional Reserves" - 
Acceptable assets equal to 
the security deposit 
requirement plus any 
additional contingent 
reserves established by the 
trustees or required by the 
department . 

(15) "Surplus" - All other 
assets a fund may have on 
hand in excess of all loss 
reserves, actual and 
contingent liabilities 
including general business 
expenses and net safety 
factors in all fund years. 

(16) "Self-Insurer" - This 
term shall include individual 
self-insurers, funds, and 
self-insurers' fund members 
unless the context clearly 
indicates a more restrictive 
definition . 

.0102 ACCEPTABLE DEPOSIT FUNDS 

OR SURETY BOND 
(a) In addition to cash, the 
deposit funds acceptable to the 
commissioner as a security 
deposit shall be U.S. Government 
bonds, notes or bills, issued or 
guaranteed by the United States 
of America; money market funds 
which are invested only in U.S. 
Government or government agency 
obligations with a maturity of 
one year or less; certificates 
of deposit issued by a duly 
chartered commercial bank or 
thrift institution in the State 
of North Carolina which are 
protected by the Federal Savings 
and Loan Insurance Corporation; 
and such other investments as 
arc approved by the commissioner 
or surety bonds in a form 
acceptable to the department and 
issued by any corporate surety 
which meets the qualifications 
prescribed in Rule .0102(a)(2) 
of this Subchapter. 

(1) All bonds or securities 
which are posted as security 
deposits shall be valued 
annually at market value. 
In the event market value is 
less than face value, the 
department may require that 
additional securities be 



504 



NORTH CAROLINA REGISTER 



posted by the self-insurer. 
In making such a 
determination, the 

department shall consider 
the self-insurer's financial 
condition. the amount by 
which market value is less 
than face value, and the 
likelihood that such 
securities will be needed to 
provide benefits. 
(2) In order for a surety 

bond issued by a corporate 
surety to be acceptable as 
fulfilling, in whole or in 
part the security deposit 
requirements for a 
self-insurer, the corporate 
surety shall be authorized 
by the commissioner to 
transact such business in 
North Carolina. 

(b) Any securities so 
deposited shall be assigned to 
the Commissioner of Insurance, 
his successors and assigns or 
trusteed pursuant to a trust 
document which is acceptable to 
the commissioner. In case of 
any default of a self-insurer, 
employer or fund, the 
commissioner may sell and/or 
collect such amounts as shall 
yield sufficient funds to pay 
benefits and compensation 
awarded . Default shall mean the 
failure to make timely payments 
of any awards or other 
disbursements required pursuant 
to the act . Interest accruing 
on a negotiable security so 
deposited shall be collected and 
transmitted to the depositor 
provided that the depositor is 
not in default. All deposits 
shall remain in the custody of 
the commissioner until such time 
as all obligations of the 
self-insurer have fully been 
discharged. At such time the 
commissioner shall return the 
securities to the self-insurer. 

(c) No judgment creditor, 
other than claimants for 
benefits under the act shall 
have a right to levy upon any of 
the self-insurer's assets held 
in such deposit . 

(d) All securities shall be 
deposited through the Department 
of Insurance and shall be 
accompanied by an appropriate 
board or trustee resolution and 
any bond or stock powers or 
trust documents necessary to 
render such securities 
negotiable by the commissioner. 

.0103 EXCHANGE AND WITHDRAWAL 
OF SECURITIES 

(a) Any securities held by the 
Department of Insurance may be 
exchanged or replaced by the 
depositor with other securities 



of like nature and amount as 
long as the self-insurer is 
solvent. No release shall be 
effectuated until replacement 
securities or bonds of an equal 
value have been substituted. 
Any surety bond may be exchanged 
or replaced with another surety 
bond. which meets the 
requirements of this Regulation 
provided reasonable notice of 
not less than 30 days is given 
to the Department of Insurance . 
Whenever a self-insurer ceases 
to self-insure or desires to 
replace securities with an 
acceptable surety bond(s), he 
shall so notify the department 
and may recover all or a portion 
of the securities deposited with 
the department upon posting in 
lieu thereof an acceptable 
special release bond issued by a 
corporate surety qualified 
pursuant to this Regulation in 
an amount equal to the total 
value of such securities. The 
special release bond shall cover 
all existing liabilities under 
the act plus an amount to cover 
future loss development and 
shall remain in force until such 
time as all such obligations 
under the act have been fully 
discharged . 

.0104 FILING OF REPORTS 
(a) Each employer or group of 
employers self-insured under the 
act shall submit to the 
department payroll information 
as herein required. The rules, 
classifications and rates as set 
forth in the currently approved 
Workers' Compensation and 
Employers' Liability Insurance 
Manual will govern the audits of 
payrolls and the adjustments of 
premiums. Payroll information 
shall be submitted summarized by 
classification. Each 

self-insured employer or group 
of employers shall maintain a 
true and accurate payroll 
record, which shall be made 
available during reasonable 
business hours, upon demand, to 
the commissioner or his 
authorized representatives. An 
employer may keep payroll 
records outside the State of 
North Carolina upon written 
approval granted by the 
commissioner within his 
discretion, provided that in 
such event the employer shall 
make such records available for 
inspection within the state 
within ^0 days of any request 
for inspection by the 
department . Unless payroll 
records are maintained in such 
manner that a true and accurate 
division by departments or 



NORTH CAROLINA REGISTER 



505 



occupational classifications can 
readily be determined for proper 
rating, the entire payroll of 
that employer shall be presumed 
to be within the classification 
to which the highest insurance 
rate is applicable. 

(b) In addition, each 
individual self-insurer and 
group self-insurer shall submit 
the following information not 
later than 30 days subsequent to 
the filing deadline for 
reporting of summary loss data. 

(1) an explanation of the 
self-insurers reserving 
policy-including an 
explanation of any details 
of the adopted reserving 
policy as regards claims 
under the Workers' 
Compensation Act, and any 
specific reserve guidelines; 

(2) a statement of total 
reserves for claims incurred 
pursuant to the act 
specifically identifying 
each claim upon which is 
held a reserve in excess of 
fifty thousand dollars 
($50,000); and 

(3) a statement of the number 
of claims closed by the 
self-insurer in the previous 
fiscal period specifically 
identifying any such claims 
whereon a reserve had been 
established exceeding a 
value of ten thousand 
dollars ($10,000) and 
reporting the differences 
between the total loss paid 
and such reserve. 

(c) Summary loss reports shall 
be compiled relating to each 
employer, or group of employers, 
self-insured under the act. The 
rules on evaluation dates and 
time of filing as set forth in 
the Unit Statistical Plan of the 
principal Workers' Compensation 
insurance rating organization in 
the State of North Carolina, as 
filed with and approved by the 
commissioner, will govern the 
schedule of summary loss 
reporting and the required 
contents of the reports. Each 
self-insured employer or group 
of employers shall maintain true 
and accurate loss records, and 
summary loss data by 
classification shall be 
submitted to the department . 

(d) Each individually self- 
insured employer and group 
self-insurers fund shall file 
annual statements of financial 
condition with the department. 
These statements must be 
certified audits, except that 
individual self-insured 
employers may be allowed to 
submit non-certified audit 



reports if the employer, owner, 
partner or corporate officer, 
will attest to their being true 
and correct. Non-certified 
interim financial statements may 
be required by the commissioner 
at the end of any quarterly 
fiscal period, whenever he has 
reason to believe there has been 
a deterioration in financial 
condition of the self-insurer 
which adversely affects the 
self-insurer's ability to pay 
expected losses . 

(e) All required reports 
submitted by a service company 
for any self-insurer it services 
shall be treated as if they are 
submitted by the self-insurer 
directly . 

(f) If a self-insurer requires 
additional time to file a 
required report, then a request 
for an extension of time for 
filing shall be made in writing 
by the self-insurer or its 
service company no later than 
five working days prior to the 
filing deadline. Extensions 
will be granted by the 
department if proof is supplied 
by the self-insurer or service 
company that circumstances 
beyond the control of the 
self-insurer or service company 
have made it impossible to file 
on a timely basis. Such 
circumstances would include but 
not be limited to the accidental 
destruction of the records of 
the self-insurer or service 
company, failure of the 
department to prescribe proper 
forms, delays caused by acts of 
God or nature or delays caused 
by other regulatory processes of 
the State of North Carolina or 
United States Government . 
Clerical errors, personnel 
turnover, intentional 
destruction of forms and records 
by employees of the self-insurer 
or service company or any delays 
caused by the inefficiency of 
the employees of the 
self-insurer or service company 
shall not be grounds for 
extension. Extensions, if 
granted, shall be in writing 
with notice mailed to the 
self-insurer or service company. 
Such extension will establish a 
new one-time due date. Repeated 
late filings of reports may be 
grounds for revocation of the 
self-insurance option. 

(g) The commissioner may also 
require the filing of special 
reports . 

.0105 CONTRACTS FOR EXCESS 

INSURANCE 
(a) Any excess workers' 



506 



NORTH CAROLINA REGISTER 



compensation insurance policy 
submitted in fulfillment of the 
excess insurance requirements 
shall be written by either a 
licensed or surplus lines 
insurance company. 

(b) No contracts or policy of 
excess liability insurance 
issued or renewed after the 
effective date of this 
Regulation shall be recognized 
by the department in considering 
the ability of a self-insurer to 
fulfill its financial 
obligations under the Workers' 
Compensation Act unless such 
contract or policy: 

1 1 ) is not cancellable except 
upon at least 30 days 
written notice by registered 
or certified mail to: 

(A) the other party to the 
policy, and 

(B) the department. 

(2) is automatically 
renewable at the expiration 
of the policy period unless 
written notice of intent to 
non-renew is given at least 
45 days prior to such 
expiration, by the party 
desiring to cancel or not 
renew the policy or 
contracts by registered or 
certified mail to: 

(A) the other party to the 
policy or contract; and 

(B) the department. 

(3) if it contains any type 
of commutation clause, 
provides : 

(A) that any commutation 
effected thereunder shall 
not relieve the 
underwriter or 
underwriters of further 
liability with respect to 
claims and expenses 
unknown at the time of 
such commutation or in 
regard to claims 
apparently closed but 
which may be subsequently 
revived by or through a 
competent authority, and 

(B) that in the event the 
underwriter proposes to 
redeem any future payments 
payable as compensation 
for accidents occurring 
during the term of the 
policy by the payment of a 
lump sum to be fixed as 
provided in the 
commutation clause of the 
policy, such commutation 
is to comply with the 
applicable requirements of 
the Workers' Compensation 
Act, and; 

(4) contains the provision 
that the excess carrier 
agrees to be subject to the 
claims handling standards 



established by statute and 
regulation for carriers and 
self-insurers . 

(c) No more than one named 
insured or one self-insurcrcd 
group shall be covered by any 
contract or policy of excess 
liability insurance except that 
an individual self-insurer may 
include, in addition to a 
principal named insured, named 
subsidiary or controlled 
affiliate corporations or 
entities. In the case of group 
self-insurance, the named 
insured shall be the group 
self-insurer or its statutory 
successor interest. Any 
reinsurance contract issued on 
any such contract or policy of 
excess liability shall contain a 
clause providing that, 

(1) such reinsurance is 
written expressly for, and 
for the protection of the 
named insured, and 

(2) in the event of the 
aggregate or specific excess 
underwriter's going into 
liquidation or being 
otherwise unable to pay 
compensation or other 
benefits due for injuries to 
employees of the named 
insured, the reinsurer(s) if 
any, of the aggregate or 
specific excess 
underwriter ( s ) will pay 
directly to the named 
insured such compensation or 
other benefits as may be due 
under the terms of the 
reinsurance contract (s). 

(d) All self-insurers shall 
file a copy of any excess 
insurance contracts with the 
department. Copies of all new 
contracts or policies of excess 
insurance complete with all 
endorsements shall be filed with 
the department within 90 days 
after the effective date of the 
policy. A binder issued by the 
excess carrier or its authorized 
agent providing for at least 90 
days coverage and specifying the 
terms of the policy shall be 
filed with the department within 
30 days after the effective date 
of the policy provided that this 
proof of excess coverage is not 
being submitted in support of an 
application for self-insurance. 
Excess insurance arrangements, 
between an excess carrier and a 
self-insurer, in support of an 
application for authorization to 
establish a new self-insurance 
program shall be evidenced at 
the time of submission of the 
application by either: 

(1) a binder of coverage 

issued by an excess carrier 
or its authorized agent or; 



NORTH CAROLINA REGISTER 



507 



(2) a cover note from the 
excess carrier. 
It shall not be necessary to 
file copies of renewal excess 
policies provided a new policy 
number is not issued and a 
renewal endorsement specifying 
the terms of the policy is 
submitted to the department 
within 30 days after the renewal 
date. The filing deadline in 
this Paragraph shall not apply 
if an existing excess policy is 
cancelled or non-renewed by the 
excess carrier or the 
self-insurer, in which case, the 
self-insurer shall within 30 
days of the cancellation or 
non-renewal date file proof of 
replacement excess coverage or 
post additional security 
acceptable to the commissioner 
in lieu thereof. 

(e) Any self-insurer operating 
a plan of self-insurance under 
approval granted prior to the 
effective date of this 
Regulation shall within one year 
or upon any earlier expiration 
of existing excess contracts of 
excess insurance, renegotiate 
replacement coverage to conform 
to those standards for excess 
liability insurance contained 
herein. 

.0106 SERVICING REQUIREMENTS 
(a) Each self-insurer as a 
condition of approval to 
self-insure shall be required to 
provide proof of compliance with 
the provisions of this Section 
regarding its ability to operate 
a plan of self-insurance, either 
through in-house capabilities or 
servicing companies. 

(1 ) It shall be the sole 

responsibility of each 
self-insurer to make 
provision for competent 
persons to service its 
program in the areas of 
claims adjusting, 

underwriting, safety 

engineering and loss 
control. Each self-insurer 
shall maintain an employee 
or claims agent within the 
state empowered to 
investigate claims, sign 
agreements for the payment 
of compensation, and issue 
drafts or checks in payment 
of obligations under the 
act . Should the 

self-insurer be unable or 
unwilling to provide any or 
all of these services 
through the use of its own 
employees, then it shall 
contract with an outside 
service company to provide 
these services on a 
full-time basis. 



(2) In the case where a self- 
insurer elects to contract 
with a service company, the 
department may use the 
service company as an 
intermediary in its dealings 
with the employer if the 
department determines that 
this course of action will 
result in a more rapid and 
more accurate flow of 
information from the 
self-insurer and aid in 
employer compliance with 
this Regulation, 
(b) Any self-insurer which 
contracts with one or more 
service agents shall through 
contract provision set for its 
contractor minimum standards 
respecting facilities and 
experienced, qualified personnel 
in such numbers as will afford 
timely and adequate services to 
meet the needs of the 
self-insurer . 

( 1 ) The self-insurer shall 
cause to be filed with the 
commissioner a biographical 
sketch of the principal 
officers of the service 
company including all 
partners of a partnership 
and officers of a 
corporation . 

(2) The self-insurer shall 
provide or cause to be 
provided to the commissioner 
a listing of those 
experienced and qualified 
claims personnel employed on 
a full-time basis, including 
licensed workers' 
compensation claims 
adjusters, to meet the needs 
of the self-insurer. At 
least one such licensed 
claims adjuster shall be 
situated within the State of 
North Carolina. Service 
contracts may provide for 
such subcontracts to assign 
a portion of contracted 
responsibilities if any or 
all subcontractors also 
conform to the requirements 
herein . 

(3) The self-insurer shall 
demonstrate that it or each 
selected service agent it 
employs has a sufficient 
number of experienced and 
qualified persons employed 
on a full-time basis in the 
areas of loss control and 
safety engineering to meet 
the needs of the 
self- insurer . Service 
contracts may provide for 
subcontracts whereby a 
portion of the contractor's 
responsibilities are 
assigned, if the 



508 



NORTH CAROLINA REGISTER 



subcontractor also conforms 
to the requirements herein. 

(4) The self-insurer shall 
demonstrate that it or each 
selected service agent it 
employs has a sufficient 
number of experienced and 
qualified persons employed 
on a full-time basis in the 
area of underwriting to meet 
the needs of the 
scl f- insurer . Service 
contracts may provide for 
subcontracts which assign a 
portion of contracted 
responsibilities if the 
subcontractor also conforms 
to the requirements herein. 
In this context , 
underwriting includes, but 
is not limited to the 
overall planning and 
coordinating of a 
self-insurance program, the 
ability to procure bonds and 
excess insurance, the 
ability to provide summary 
data regarding the 
self-insurer's cost of 
accidents including the 
frequency and distribution 
by type and cause, and the 
skill to make 
recommendations to the 
self-insurer regarding the 
correction of any 
deficiencies that arise in 
the self-insurance program. 

(5) The self-insurer shall 
demonstrate that each 
selected service agent has a 
person or if the service 
company is a corporation, 
appointed clerk authorized 
to act in all matters 
concerning the service 
company . 

(c) In support of its 
application, the self-insurer 
shall cause to be submitted 
summary information concerning 
the organization and staff of 
any service agent selected. In 
addition, detailed resumes of 
all employees with 
administrative or professional 
capacity who will or may be 
involved in providing services 
under this Regulation are 
required on affidavits 
acceptable to the commissioner. 

(d) Each self-insurer 
contracting with a service 
company shall file with the 
commissioner, within 30 days of 
contract execution. a copy of 
its service contract. Each 
contract entered into with a 
servicing carrier for claims 
handling shall provide that all 
claims incurred during the 
contract period shall be handled 
until their conclusion. 

(e) Replacement contracts 



shall be negotiated with only 
those service agents which will 
provide no lesser standard of 
service than the original 
contract required. Results of 
any changed method of servicing 
shall ensure adequate service to 
claimants and the self-insurer. 
Each self-insurer shall report 
to the commissioner termination 
of a service contract within 10 
days of such termination. 

(f) Each service contract 
entered into by a self-insurer 
shall contain provisions 
requiring the service company 
to: 

( 1 ) Render to the self- 
insurer no less frequently 
than annually a financial 
statement consisting of a 
balance sheet and profit and 
loss statement prepared on 
the basis of generally 
accepted accounting 
principles consistently 
applied: and 

(2) In the event that the 
service company has 
contracted for the 
responsibility of claims 
handling, render a report of 
the status of outstanding 
claims files activity no 
less frequently than 
annually or more frequently 
as otherwise requested by 
the self-insurer. 

(3) The self-insurer shall 
file all such reports with 
the department within 30 
days of their receipt. 

(g) Except as provided in 
Rule .0104 (a) herein, each 
self-insurer shall maintain or 
cause to be maintained within 
the State of North Carolina, 
copies of all records sufficient 
in type and quantity to verify 
the accuracy and completeness of 
all reports and documents 
submitted to the department 
pursuant to this Regulation. 
These records shall be open to 
inspection by representatives of 
the department during regular 
business hours. All records 
shall be retained for periods of 
time sufficient to ensure their 
availability for audit purposes. 
In the absence of other 
guidelines established by the 
department, all records shall be 
retained according to the 
schedule adopted by the 
department for similar 
documents. The location of 
these records shall be made 
known + o the department as 
necessary for audit purposes. 

(h) Audits, if ordered, shall 
be performed by accountants or 
auditors acceptable to the 
department. The cost of such 



NORTH CAROLINA REGISTER 



509 



audits shall be borne by the 
self-insurer. After each audit, 
a written report shall be 
prepared and submitted to the 
commissioner with a copy to the 
self-insurer . 

(i) Failure of a self-insurer 
to make adequate provisions for 
servicing its self-insurance 
program of workers' compensation 
either through in-house 
capability or one or more 
qualified and adequately staffed 
service agent may be grounds for 
revocation or denial of 
authority to continue in the 
option of self-insurance. 

(j) Copies of all service 
contracts pursuant to which 
services are currently being 
performed which were executed 
between any self-insurers and 
service agent prior to the 
effective date of this 
Regulation shall be filed with 
the commissioner within 30 days 
following the effective date of 
this Regulation. 

.0107 REVOCATION OR 

TERMINATION OF SELF- 
INSURANCE PRIVELEGE 

(a) The following may 
constitute grounds for denial of 
the right to continue the option 
of self-insurance: 

(1) Failure to comply with 
regulations by the 
commissioner . 

(2) Deterioration of 
financial condition 
adversely affecting the 
self-insurer's ability to 
pay expected losses . 

(3) Failure to pay any lawful 
assessment of the North 
Carolina Self -Insurance 
Guaranty Association. 

(b) All self-insurers shall be 
afforded a hearing before 
revocation of a certificate 
shall occur. 

(c) The identity of any 
employer authorized to 
self-insure either individually 
or as a member of a group 
pursuant to this Regulation 
shall be determined by the 
ownership of the entity on the 
date on which its certificate of 
authorization is issued. Upon a 
change in majority ownership, 
the employer's authority to 
self-insure shall automatically 
terminate and the employer must 
reapply for approval in order to 
continue the option of 
self-insurance. To the extent 
practicable, any such 
self-insurer shall notify the 
commissioner in writing prior to 
the date upon which such a 
change is effected. The 
commissioner in his discretion 



may extend the termination date 
in order to provide the employer 
an appropriate period of time 
within which to submit the 
information required pursuant to 
this Regulation to qualify for a 
new certificate of 
authorization . 

(d) All self-insurers which 
shall have been authorized on or 
permitted to adopt a plan of 
self-insurance pursuant to 
Chapter 97 of the North Carolina 
General Statutes or predecessor 
statute(s) on or before the 
effective date of this 
Regulation, shall submit the 
data required by this Regulation 
within the filing deadlines 
contained herein. The 
commissioner may, at his 
discretion, provide additional 
time for such self-insurers to 
comply with this Section. 

.0108 TRANSITION PROVISIONS 

(a) All individual employers 
and groups approved as 
self-insurers prior to January 
1 , 1987 shall comply with terms 
of this Regulation. Grace 
periods are expressly provided 
for such existing self-insurers 
to achieve compliance with 
certain provisions of the 
regulation within the terms of 
those provisions. 

(b) In the event that 
compliance with the 
recordkeeping, experience 
reporting or servicing 
requirements would create a 
hardship, any self- insurer 
approved prior to January 1 , 
1987 may apply to the 
commissioner for temporary 
approval to deviate from 
specific requirements imposed by 
this Regulation. Application 
for such approval shall be made 
in writing, shall explain in 
detail the reasons for the 
request and shall contain a good 
faith estimate of the period 
reasonably needed to achieve 
compliance. Where appropriate, 
the application may also contain 
suggested alternatives for 
achieving substantial compliance 
with the terms of the 
requirement during any requested 
grace period. Approval may be 
granted by the commissioner in 
his discretion upon a showing of 
hardship; such approval shall be 
in writing, shall set forth a 
definite period of time within 
which the applicant shall be in 
compliance, and shall contain 
any conditions which the 
commissioner in his judgment 
deems necessary. In no event 
shall such approval be granted 
if: 



510 



NORTH CAROLINA REGISTER 



( 1 ) it could create a danger 
to the applicant's solvency 
or ability to satisfy its 
obligations under the act; 

(2) there is reason to 
believe that the 
self-insurer has suffered a 
deterioration of financial 
condition adversely 
affecting the self-insurer's 
ability to pay expected 
losses; or 

(3) it could impede the 
department's ability to 
obtain information relevant 
to adequate monitoring of 
the self-insurer's financial 
condition . 

SECTION .0200 - INDIVIDUAL 
SELF-INSURERS 

.0201 APPLICATION 

(a) Each employer desiring to 
become a self-insurer 
individually shall make 
application to the department 
for such privilege on a form 
prescribed by the department . 
This application shall be filed 
with the department at least 45 
days prior to the desired 
effective date of coverage. The 
application shall contain 
answers to all questions 
propounded and shall be a sworn 
statement. Until all requested 
data has been filed an 
application shall be regarded 
incomplete . 

(b) In addition to the filing 
of the application, compliance 
with all of the following shall 
be required: 

(1) The applicant shall 

provide the department with 
certified statements of 
financial condition of 
current origin and the two 
next most recent years 
including, at a minimum, a 
balance sheet, a profit and 
loss statement and a 
statement of change in fund 
position, prepared on the 
basis of generally accepted 
accounting principles 
consistently applied. Such 
statements may be 
non-certified if the 
self-insurer is a 
proprietorship, partnership 
or corporation and if such 
statements are attested to 
by an officer or owner 
therein who beneficially 
owns more than 50"^ of the 
equity in the business. 
Public employers, including 
public non-profit employers, 
may furnish a copy of 
current year budget or audit 
report in lieu of a 



certified financial 

statement . 

(2) Except as provided in 
Rule .0202(d) and (e) of 
this Subparagraph, specific 
and/or aggregate excess 
insurance, with policy 
limits and retention amounts 
acceptable to the 
department, shall be 
required in each 
self-insured program. 

(3) Each individual self- 
insurer shall satisfy the 
department that either it 
has, within its own 
organization, ample 
facilities and competent 
personnel to service its own 
program with respect to 
claims administration, or 
shall contract with a 
service company, to provide 
these services. If any plan 
servicing is to be done by 
the self-insurer, a 
biographical sketch of those 
persons responsible for and 
performing such functions 
shall be submitted to the 
department with the 
appl icat ion . 

(c) Only employers whose 
modified workers' compensation 
insurance premium in this State 
has reached one hundred thousand 
dollars ($100,000.00) a year and 
whose total fixed assets in 
North Carolina amount to five 
hundred thousand dollars 
($500,000.00) or more will be 
eligible to apply for individual 
self-insurer status. For good 
cause shown, the Commission may 
waive the requirement on fixed 
assets or minimum premium 
volume. In considering the 
financial strength and liquidity 
of the employer to pay normal 
compensation claims the 
department will consider, among 
other evaluative criteria: 

(1) organizational structure 
and management background; 

(2) profit and loss history; 

(3) source and reliability 
of financial information; 

(4) compensation loss 
history ; 

(5) number of employees; 

(6) claims administration; 

(7) excess insurance; 

(8) access to excess 
insurance markets; 

(9) ratio of current assets 
to current liabilities; 

(10) ratio of tangible net 
worth to annual 
self- insurance retention; 

(11) ratio of net worth to 
annual compensation premium; 

(12) ratio of working capital 
to total assets; 

(13) ratio of quick assets to 



NORTH CAROLINA REGISTER 



511 



current liabilities; 

(14) ratio of debt to 
tangible net worth; 

(15) ratio of total debt to 
total assets; 

(16) ratio of cash flow to 
total debt; 

(17) ratio of new sales to 
total assets; 

(18) ratio of new income to 
total assets; 

(19) ratio of net income to 
net sales; 

(20) if a mercantile or 
manufacturing business, the 
ratio of net credit sales to 
average accounts receivable; 

(21) ratio of income before 
interest and taxes (income) 
to annual interest expense; 

(22) such other meaningful 
financial analysis in each 
instant case, as the 
commissioner may apply; 

(23) All financial statement 
formulations shall be 
provided in such detail as 
to facilitate application of 
indicated ratio analyses. 

(d) Each employer shall 
execute and file with the 
department an agreement, which 
shall be part of his 
application, wherein he agrees: 

(1) to fully discharge by 
cash payment all amounts 
required to be paid by the 
provisions of the act; 

(2) to deposit with the 
commissioner, through the 
Department of Insurance, 
cash, acceptable securities 
or a corporate surety bond 
issued by an authorized 
insurance carrier to secure 
the payment of compensation 
liabilities as they are 
incurred . 

(e) After considering the 
application and all supportive 
data, the department shall 
either grant authorization or 
advise the applicant of 
deficiencies which constitute 
the basis for denial. If the 
deficiencies are resolved to the 
department's satisfaction within 
30 days of the department's 
notice, authorization shall be 
given to the applicant. 

(f) The employer may, at the 
discretion of the department, be 
granted additional time to 
remedy deficiencies in its 
application in order to moot the 
requirements for authorization 
as a self-insurer. A request 
for an extension of time shall 
be made in writing by the 
employer within the 30 day 
compliance period established in 
Rule .0201(e). If the 
department does not receive 
proof that all requirements for 



the self-insured program have 
been met within the time 
allotted, the application shall 
be considered withdrawn. 

(g) Upon meeting the 
requirements of the department, 
an employer shall receive a 
written certificate of 
authorization of his status as a 
self-insured employer. 

.0202 MINIMUM DEPOSIT FUNDS OR 
BOND: EXCESS INSURANCE 
REQUIREMENTS 

(a) Each individually self- 
insured employer shall, at the 
effective date of operation of 
its plan of self-insurance, 
deposit with the commissioner, 
cash, acceptable securities or 
post a surety bond issued by a 
corporate surety authorized as 
an insurance carrier to do 
surety business in the State of 
North Carolina in the minimum 
amount of three hundred thousand 
($300,000.00). A surety bond or 
security deposit in excess of 
the minimum may be required by 
the commissioner based upon the 
financial status of the 
self-insurer or if the 
self-insurer has experienced a 
deterioration in financial 
condit ion . 

(b) Funds so held by the 
commissioner shall be 
accompanied by appropriate legal 
instruments to effectively 
assign right, title and interest 
in such assets solely for 
meeting obligations incurred 
under the act . 

(c) If an employer ceases to 
be a self-insurer, the bond or 
security deposit required shall 
be equal to outstanding 
self-insurers' workers' 
compensation liabilities plus an 
amount adequate to cover future 
loss development, as approved by 
the department . 

(d) All individual self- 
insurers, except individual 
public employer self-insurers, 
with a net worth of at least 
twenty-five million dollars 
($25,000,000.00) and total fixed 
assets in North Carolina of at 
least three hundred million 
dollars ($300,000,000.00) shall 
maintain specific excess 
insurance unless the department, 
in its discretion, shall waive 
sucli a requirement . Such 
specific excess insurance shall 
have a limit of at least two 
million dollars ($2,000,000.00). 
Higher limits may be required 
for those businesses or entities 
witli a higher risk of multiple 
injury from a single occurrence. 
The retention underlying 
specific excess policies shall 



512 



NORTH CAROLINA REGISTER 



be the lowest retention 
generally available for 
businesses or entities of 
similar size and exposure, but 
may, at the commissioner's 
discretion. be established at 
higher levels consistent with 
the employers's claims 
experience and financial 
condition . 

(e) All individual self- 
insurers except individual 
public employer self-insurers, 
with either a net worth of less 
than twentv-five million dollars 
($25,000,000.00) or total fixed 
assets in North Carolina of less 
than three hundred million 
dollars ($300,000,000.00) shall 
maintain aggregate excess 
insurance unless the 
commissioner in his discretion 
shall waive this requirement . 
The amount of such insurance and 
the self-insurance retention 
shall be subject to individual 
determination by the department. 

.0203 FILING OF REPORTS 

(a) A report may be submitted 
on other than a prescribed form 
with the prior approval of the 
department. The deadlines for 
filing of prescribed reports are 
as provided in this Regulation. 
Reports other than those with 
prescribed due dates shall be 
filed at such times as the 
department shall establish and 
excepting reporting related to 
financial distress, shall not be 
required to be filed without 30 
days prior written notice. 

(b) Copies of all final 
payroll reports showing payrolls 
by appropriate classification 
shall be filed. 

(c) Each individually self- 
insured employer shall be 
responsible for promptly 
reporting to the department 
changes in the names and 
addresses of the businesses it 
self-insures or intends to 
self-insure as well as changes 
in its structure with respect to 
divisions, subsidiaries and the 
like. Such changes shall be 
reported to the department by 
letter within 10 days after the 
effective date of the change. 
Appropriate endorsements to 
surety bonds and/or excess 
insurance policies specifying 
any additional named insureds 
shall be filed within 90 days of 
the effective date of the 
change. Bonds of coverages or 
cover notes providing for at 
least 90 days coverage shall be 
filed within 30 days after the 
effective date of the change. 

(d) Each individually self- 



insured employer shall submit a 
statement of financial condition 
meeting the criteria established 
in Rule .0201(b)(1) within six 
months following the close of 
its fiscal year. 

(e) Within 60 days of the 
evaluation date of the losses 
for a coverage period, each 
individual self-insurer shall 
submit an annual report of 
outstanding workers' 
compensation liabilities. Such 
report shall show liabilities, 
excess carrier and other 
qualifying credits, if any, and 
net retained liabilities. 

(f) All individual self- 
insurers shall maintain such 
payroll records as are necessary 
to complete and verify the 
accuracy of the annual 
solf-injurers payroll report 
available for inspection at a 
location situated within the 
State of North Carolina, except 
as provided in Rule .0104(a) 
herein . 

(g) All such payroll and 
claims records shall be open to 
inspection by authorized 
representatives of the 
department during regular 
business hours. All such 
records shall be retained for a 
period of time sufficient to 
ensure their availability for 
audit purposes. In the absence 
of other guidelines, the records 
shall be retained according to 
the schedules adopted by the 
department for similar 
documents. The location of 
these records shall be made 
known to the department upon the 
application for self-insurance 
and at such times thereafter 
sufficient to keep the 
department informed of such 
location . 

(h) Each individual self- 
insurer's payroll and claims 
records may, at the discretion 
of the commissioner, be audited. 
If ordered, such audits shall be 
performed by accountants or 
auditors acceptable to the 
department. The cost of such 
audits shall be borne by the 
party examined. 

(i) After each audit 
conducted, a written report 
shall be prepared and submitted 
to the Commissioner of Insurance 
with a copy to the self-insurer, 
such report to be a part of the 
annual review for compliance 
with this Regulation. Any 
deficiencies cited by the audit 
report shall be considered in 
determining whether there may be 
grounds for the revocation or 
termination of the 
self-insurance option. 



NORTH CAROLINA REGISTER 



513 



(j) An individual self-insurer 
which does not have the proper 
recordkeeping capability within 
the state on the effective date 
of the regulation, shall be in 
compliance with this Section 
within one year after such 
effective date. 

(k) Summary Loss Reports 
formatted by classifications as 
prescribed in the Unit 
Statistical Plan of the 
principal workers' compensation 
rating organization in this 
state shall be filed as required 
by the department . 

SECTION .0300 - GROUP 
SELF-INSURERS 

.0301 APPLICATION 

(a) Application may be made to 
provide group coverage and to 
provide workers' compensation 
coverage for a group of 
employers in accordance with the 
terms of an indemnity agreement . 
Application shall be made to the 
department for such privilege on 
forms prescribed by the 
department, and this application 
shall be filed with the 
department at least 60 days 
prior to the desired effective 
date of the coverage. The 
application shall contain 
answers to all questions 
propounded and shall be a sworn 
statement. Until all requested 
data has been filed, an 
application shall be regarded as 
incomplete . 

(b) The application shall 
include but not be limited to 
the following: 

(1) a copy of the bylaws of 
the proposed fund; 

(2) an individual 
application of each member 
of the group applying for 
coverage in the fund on the 
inception date of the fund; 

(3) a current certified 
financial statement of each 
member, including at a 
minimum, a balance sheet, a 
profit and loss statement, a 
statement of change in fund 
position, and a statement 
showing the combined net 
worth of all members 
applying for coverage on the 
inception date of the fund. 
Such combined net worth 
shall be of an amount that 
establishes the financial 
strength and liquidity of 
the businesses. Public 
employers and non-profit 
employers may furnish a copy 
of a current year budget or 
audit report in lieu of a 
certified financial 
statement ; 



(4) evidence of the 
financial ability of the 
group to meet its 
obligations under the act; 

(5) a composite listing of 
the estimated standard 
premium to be developed for 
each member individually and 
in total as a group . 
Payroll data for each of the 
three preceding years shall 
be furnished by risk 
classification; 

(6) documented agreement by 
each member to pay to the 
fund not less than 25% of 
estimated annual manual 
premium not later than the 
initial day of coverage 
afforded by the fund; 

(7) a confirmation of any 
required excess insurance by 
a recognized carrier in an 
amount estimated acceptable 
to the commissioner; 

(8) designation of the 
initial board of trustees 
and/or administrator; 

(9) proof of fidelity 
bonding covering the fund 
administrator in a form and 
an amount acceptable to the 
commissioner ; 

(10) an indemnity agreement 
jointly and severally 
binding the group and each 
member thereof to comply 
with the provisions of the 
act and pay obligations 
imposed by the act, which 
shall conform to an 
indemnity agreement 
prescribed by the 
department ; 

(11) a breakdown of all 
projected administrative 
expenses for the fund year 
in dollar amount and as a 
percentage of the estimated 
annual manual premium; 

(12) proof provided by the 
trustees, satisfactory to 
the department, that the 
annual gross premiums of the 
fund will be not less than 
one hundred thousand 
($100,000.00); 

(13) proof, satisfactory to 
the department, that either 
the fund has, within its own 
organization, ample 
facilities and competent 
personnel to service its own 
program with respect to 
underwriting matters, claims 
adjusting and industrial 
safety engineering or shall 
contract with a service 
company to provide these 
services and reporting of 
the loss data to the 
department. If any plan 
servicing is to be done by 
the self-insurer, a 



514 



NORTH CAROLINA REGISTER 



biographical sketch of those 
persons, responsible for and 
performing such functions 
shall be submitted to the 
department with an 
application . 
(14) a letter of assent 

stipulating the applicants 
acceptance of membership 
status in the North Carolina 
Self-Insurance Guarantee 
Associat ion . 

(c) After considering the 
application and all supportive 
data, the department shall 
either grant authorization or 
inform the applicant of 
deficiencies which constitue the 
basis for denial. If the 
deficiencies are resolved to the 
department's satisfaction within 
30 days of the department's 
notice, authorization shall be 
given to the applicant. 

(d) The group may, at the 
discretion of the department, be 
granted additional time to 
remedy the deficiencies in its 
application in order to meet the 
requirements for the 
self-insured program. A request 
for an extension of the time 
shall be made in writing by the 
group within the 30 days 
compliance period established in 
Rule .0301(c). If the 
department does not receive 
proof that all requirements for 
the self-insurer have been met 
within the time prescribed, the 
application shall be considered 
withdrawn . 

(e) Upon meeting the 
requirements of the department, 
the group shall receive a 
written ceritificate of 
authorization as a self-insurer. 
The group shall submit periodic 
reports as prescribed by the 
commissioner . 

.0302 MINIMUM SECURITY DEPOSIT 
OR BOND FOR GROUP SELF- 
INSURANCE FUNDS: EXCESS 
INSURANCE REQUIREMENTS 
(a) Each group self-insurer's 
fund shall deposit with the 
Commissioner of the Department 
of Insurance, not later than the 
effective date of coverage, 
cash, acceptable securities, or 
post a surety bond issued by a 
corporate surety authorized as 
an insurance carrier to do 
business in the State of North 
Carolina; the minimum bond or 
security deposit amount shall be 
four hundred thousand dollars 
($400,000.00). A surety bond or 
security deposit in excess of 
the minimum so determined may be 
required by the commissioner if 
he determines that the 
self-insurer has experienced a 



deterioration in financial 
condition. Funds so held by the 
commissioner shall be 
accompanied by appropriate legal 
instruments to effectively 
assign right, title and interest 
in such assets solely for 
meeting obligations incurred 
under the act . 

(b) The amount of the security 
deposit or bond shall bo 
determined at least annually 
based on data submitted by the 
self-insurer's to the 
department . 

(c) Each group self-insurer 
shall maintain specific excess 
insurance with a limit of at 
least two million dollars 
($2,000,000.00). Self-insurer's 
funds composed of businesses 
with a high risk of multiple 
injury from a single occurrence 
may be required by the 
department to maintain higher 
limits. The retention of the 
required specific excess 
coverage shall bo the lowest 
retention generally available 
for self-insurer's fund with 
similar exposures and annual 
premium, but may at the 
commissioner's discretion, bo 
established at higher levels 
consistent with the employer's 
claims experience and financial 
condition . 

(d) Each self-insurers' funds 
shall maintain aggregate excess 
insurance unless a security 
deposit acceptable to the 
commissioner is made or 
unencumbered surplus or 
additional loss funds in amount 
and asset form acceptable to the 
commissioner is held by the 
group self-insurer fund. The 
aggregate excess limit and 
aggregate retention for a 
self-insurer's fund shall be 
acceptable to the department. 

.0303 ADMISSION OF NEW 

MEMBERS: TERMINATION OF 
INDIVIDUAL MEMBERS 

(a) After the inception date 
of a fund, prospective new 
members of a fund shall submit 
an application for membership to 
the board of trustees, or its 
administrator, on a form 
approved or prescribed by the 
department . The trustees or 
administrator may approve the 
application for membership 
pursuant to the bylaws of the 
group self-insurer. The 
application for membership shall 
then be filed with the 
department. Membership shall 
take effect after approval by 
the department . Members shall 
receive a certificate of 
coverage from the trustees on a 



NORTH CAROLINA REGISTER 



515 



form acceptable to the 
commissioner . 

(b) Individual members may 
elect to terminate their 
participation in a group 
self-insurers' fund and may be 
subject to cancellation by the 
group self-insurers' fund 
pursuant to the bylaws of the 
fund. However, such termination 
or cancellation shall not take 
place for at least 10 days after 
the department has received 
notice of the termination or 
cancellation from the fund. Not 
less than 30 days notice shall 
be given to a member prior to 
any termination by the fund. 

.0304 FILING OF REPORTS 
(a) Reports as to financial 
condition, payroll records, 
coverage, accident experience 
and compensation payments and 
other reports as are required to 
be filed with the department 
shall be made as follows: 

(1) Each group self-insurers' 
fund shall file with the 
department within six months 
after the close of the fund 
year a statement of 
financial condition, such 
statements to include a 
report of the outstanding 
workers' compensation 
liabilities of the group 
self-insurers' fund 
including details of the 
amount and source of all 
monies recoverable from any 
third party. Financial 
statements shall at a 
minimum be composed of a 
balance sheet, a profit and 
loss statement , a statement 
of change in fund position 
and a listing of any and all 
accounts delinquent by more 
than 90 days. 

(2) The commissioner may 
require quarterly financial 
disclosures of a similar 
nature from individual 
members of a group 
self-insurers' fund or the 
fund if he has reason to 
believe that there has been 
a deterioration in the 
financial condition of the 
fund or of any of the fund's 
members which adversely 
affects the fund's ability 
to pay expected losses. 

(3) Summary Loss Reports 
formatted by classifications 
as prescribed in the Unit 
Statistical Plan of the 
principal workers' 
compensation rating 
organization in this state 
shall be filed as required 
by the department . 

(4) Properly classified and 



audited payrolls on each 

fund member shall be 

submitted to the department 

within 60 days after the 

evaluation date of the 

summary loss information 

required in (3) of this 

Rule. 

(5) Quarterly status reports 

that accurately reflect the 

financial condition of each 

open fund year, if required, 

shall be filed with the 

department with 45 days 

after the close of each fund 

year quarter, such to be 

signed by the Chairman of 

the Board of Trustees, or 

authorized self-insurers 

fund administrator. A 

listing of any and all 

delinquent accounts shall be 

furnished to the department 

as part of this report . 

Cb) Failure or refusal of any 

group self-insurer to file the 

above reports within the time 

limits prescribed by Regulation 

or any provision of the act may 

be grounds for revocation or 

termination of the 

self-insurance option. 

(c) It shall be the 
responsibility of each group 
self- insurers ' fund member to 
notify the fund to which it 
belongs of any changes in the 
names, addresses, structure and 
composition of any businesses or 
subsidiaries which participate 
in the fund. It shall also be 
the responsibility of the fund 
member to notify the fund of any 
additions or deletions in the 
businesses or subsidiaries 
participating in the fund. 
These changes include changes in 
majority ownership interest in 
any business or subsidiary that 
is covered or that will be 
covered by the fund. All such 
changes shall be reported to the 
fund within 10 days after the 
effective date of the change. 
Upon receipt of such notice, 
each fund shall notify the 
department in writing, of the 
changes reported to it by its 
members . 

(d) Except as provided in 
Rule .0104(a) herein, each fund 
shall maintain at the office of 
the fund administrator within 
the State of North Carolina such 
records as are necessary to the 
department pursuant to this 
Regulation as well as all 
reports necessary to establish 
the financial solvency of the 
group self-insurers' fund unless 
the fund receives prior written 
notice to hold the records out 
of state. If the fund has 
contracted with a service 



516 



NORTH CAROLINA REGISTER 



company for claims handling, the 
claims files and related records 
may be located at the offices of 
the service company. 

(e) All required reports and 
records shall be open to 
inspection by authorized 
representatives of the 
department during regular 
business hours. Records shall 
be retained for a period of time 
sufficient to ensure their 
availability for audit purposes. 
In the absence of other 
guidelines, the records shall be 
retained according to the 
schedule adopted by the 
department for similar records. 
The location of these records 
shall be made known to the 
department upon the application 
for self-insurance and at such 
times thereafter sufficient to 
keep the department informed of 
their location. 

(f) Each group self-insurers' 
records may, at the discretion 
of the conr.issioner, be audited. 
If ordered, such audit shall be 
performed by accountants or 
auditors acceptable to the 
department. The cost of such 
audits shall be borne by the 
party examined. 

(g) After each audit, a 
written report shall be prepared 
and submitted to the 
Commissioner of Insurance with a 
copy to the group self-insurers 
fund; such report to be a part 
of the annual review for 
compliance with this Regulation. 
Any deficiencies cited by this 
report shall be considered in 
determining if there are grounds 
for the revocation or 
termination of the 
self-insurance option. 

(h) Any group self-insurer 
which does not have the proper 
recordkeeping capability within 
the State of North Carolina on 
the effective date of this 
Regulation shall be in 
compliance with this Section 
within three months after the 
effective date of this 
Regulation . 

.0305 GROUP SELF-INSURERS FUND 
RESPONSIBILITIES 

(a) The trustees of each 
authorized fund shall cause to 
be adopted a set of bylaws or 
shall enter into a trust 
agreement which shall govern the 
operation of the fund. These 
bylaws or trust agreement shall 
contain, but not be limited to, 
the following subjects: 

(1) qualifications for fund 
membership, including 
undcrwr it ing considerations; 

(2) the method for selecting 



(3 



(4 



(b) 
fund 
curr 
and 
w ith 
chan 
agre 
shal 
depa 
pr io 
effe 
ordc 
revo 
is 
Regu 
or r 



the trustees, including the 
term of office; 
) the method for amending 
the bylaws and plan of 
operation; 
) the method for 
establishing and maintaining 
a loss fund, which has 
previously been approved by 
the commissioner in writing. 
Each group self-insurers' 

shall file a copy of the 
ent bylaws, trust agreement 

required written policies 
the department . Any 
ges in bylaws, trust 
orient or written policies 
1 be filed with the 
rtment no later than 30 days 
r to the date of becoming 
ctive. The department may 
r the fund to rescind or 
ke any bylaw or policy if it 

in violation of this 
lation or any applicable law 
egulat ion . 



TITLE 13 



LABOR 



Notice is hereby given in 
accordance with G.S. 150B-12 
that the Labor - Elevator and 
Amusement Device Division 
intends to adopt regulation 
cited as 13 NCAC 05 .0213 and 
amend 13 NCAC 05 .0104 and 
.0301 . 

The proposed effective date of 
this action is February 1, 1987. 



Statutory 
95-1 10.5. 



Authority : 



G.S. 



The public hearing will be 
conducted at 2:00 pm on November 
18, 1986 at Cooper Memorial 
Bldg., Room 614, 225 N. McDowell 
Street, Raleigh, North Carolina. 

Comment Procedures: People 
wanting to present oral 
testimony at the hearing, or who 
want to have written testimony 
read at the hearing, should 
provide a written summary of the 
proposed testimony to the 
department by November 13, 1986. 
Oral presentations will be 
limited to 15 minutes each. 
Written statements not presented 
at the hearing will be accepted 
by the department until November 
28, 1986. All correspondence 
should be directed to: Sam 
Wagoner, N.C. Dept . of Labor, 
Elevator Div., 214 W. Jones St., 
Raleigh, NC 27603. Interpreters 
for the hearing impaired will be 
made available if requested 24 
hours in advance . 

CHAPTER 5 - ELEVATOR DIVISION 



NORTH CAROLINA REGISTER 



517 



SECTION .0100 - PURPOSE: 
DEFINITIONS 

.0104 DEFINITIONS 
The following definitions shall 
apply throughout this Chapter: 
(12) "elevator safety code" - 
American National Standard 
Safety Code for Elevators 
Dumbwa iters , and Escalator, 
and Moving Walks, A +? +9tH- 
A17. 1-1984 with addenda and 
modifications as provided in 
Rule .0301 of this Chapter; 

SECTION .0200 - PROCEDURES 

.0213 WIRING DIAGRAMS 
Wiring diagrams for elevators 
shall be left in the machine 
room in a permanently mounted 
receptacle and shall not be 
removed except by permission of 
the Commissioner. 

SECTION .0300 - CODES AND 
STANDARDS 

.0301 ELEVATOR SAFETY CODE 
(a) The American Nat ional 



Standard 
Elevators 
Escalators , 
A17.1 1 9 71 
addenda 
A17.1b 1 -973- 
A17. 1a-19 85, 



Safety Code for 

D umbwai t ers , and 
_ -. .i » « _ • . .- i.i- 1 1 . 
anci 1 lov nig vvai jcs , 

A1 7. 1-1 984, with 

A l/.la 197 2-r 

A17.1 c 1 9 7 4-r 

A17. 1b-1985, and 



A17. lc-1966, and with 
modifications as provided in (b) 
of this Rule, has been adopted 
as the State Elevator Code. 
Copies of the code are available 
for inspection at the offices of 
the division and may be obtained 
from the American Society of 
Mechanical Engineers, United 
Engineering Center, 345 East 
47th Street, New York, New York 
10017. The cost is seventy-five 
dollars ($75.00) per book for 



non-ASME 



members and sixty 



dollars ($60.00) per book for 
ASHE members . 
(b) The provisions of the 

American National Stan dard 

Safety Code for Elevators 
thrm bwai te rs , and Escalators, and 
Mo vin g Waifcs A17.1 shall be 
subject to the following 
modifications : 

f-H- Rule -HHH^tb — bwcation 
erf VcrttsT Arid p a r a gr a ph ( 3 ) 
■to r e ad : Elev a to r ho ist w ayi, 
sh all not be v e n t ed in to 



e l e va t or ma c hin e r oom s . 
(1 ) Rule 100. led ) - 
Observation Elevators With 
E nclosed Hoistwavs. Change 
the last sentence in the 
second paragraph to read a s 

follows : Hoistwavs of 

observation elevators may be 

enclosed with glass , 

provided it is laminated 



glass conforming to the 
requirements of ANSI Z97 . 1 . 

Enclosur e 

Ro o ms and 

excep t ion 




(2) Rule 



101 ,1c(2) -- 



Observation Elevators Not 
Fully Enclosed. Change the 
rule to read as follows: 
For observation elevators 



which 



not 



fully 



enclosed . 



protection 



at 



landings shall be provided 

as follows : 

(A) An enclosure shall be 



provided 



which 



shall 



extend 



minimum 



of 10 



feet above the floor. 
(B) The enclosure shall be 



constructed 



of 



u nperforated material. 
(C) Enclosures shall be 

lo cated in the general 
line of the hoistwav. 
Horizontal clearance shall 

in 



be the same as stated 
Section 108 




-to-)- Ru+c 10 Iroe — 

for Means of 
Add a new e xcep t ion 
the e nd o-f p a r a gr aph 
-f-3-)- -to read as f o llows : -f2")- 
V ert ical ladders with 
handgr ips may be used rrs 
access to mach me rooms and 
m a c hin e ry s pa ce s of" 
denrbrr aiters arrd hand po w e r e d 
c- lcva to rs . 

■M4 Rtrte 102. 1 c — Wiring 
M e t hods im Hois tway s arrd 
Machine Ro o ms ■ (A) Change 
the reference to the 
'H la.t i o nal Elec t rical Code" 
to do i or TTte year I J t u 
ins t ead of 1 9G0 e xc e pt -for 
clearances ar o und 

con t rollers . Cl e aranc e s 
around controll e rs shall 
remain as s p e cifi e d -in t h e 
+966 Electrical C o d e . -fE-> 
Wiring diagrams -for 
eleva to rs shall be lef t in 
the machin e room -in a 
permanen t ly mounted 

receptacle and shall n ot be 
r em o v e d e xc ept by p e rmission 
of the di rec t or ■ 

-f5-> Rtrle +02-r2 — Ex ce p t io n 
-(- 2) . ehange e x cept i on < 2-)- 
to read tts f ol lows • Duets 
for hen-t in g , coo ling, 
ven t ila t in g and v e n t ing 
these spaces only may be 
installed -in ■Hie machin e 
room and m achin e ry spa c t ; . 

-f&-)- Rttie 103.2a — 
Coun t erw e ight fVrt - uards . 
€ han gc "the rul e s to re ad as 
follows : Count e i weight pit- 
guards must be p r o vided on 
aii e xpos e d sides of 
counter weights -in all pi t s 
regardless of the typ e of 



518 



NORTH CAROLINA REGISTER 



buffer used or loca t ion of 
buff er s e xc e p t wh ere 
c o r .p e n s a t in g c hain s or ropes 



er e a t tach e d 
coun t er ' . 1 , ' e igh t s , 



to 



tire 



-fxi Rul e 1 04 . 1 — Gua r ding 
erf Exp o s e d Equipmen t . 
Chang e t he r ul e to r ead ■ 
Aii e xp o sed ge a r s , 
spr o ckets , sheaves and 
rollers irn t h e hois t way , 



machint 



room , 
and roller 



spac e s 

tops s hall bo 
p r o te c t a g ains t 



m achinery 

guides err 

t ops and car 

■bo 



"Co 

and 
g uard e d 
a c cid e n t al 



( ) Rrtxc 

-to Pi t s 

( 2 ) to 



+&G 



12(2) 
Change 



Access 




p aragrap n 
r ead as follows ■ 
Access to all e leva t or pi t s 
which do not have a separate 
access door shall bo 
try means of fixed 
ladders of non 
material . The 
iad d cr shall bo l o ca ted on 
t lie s ide ox the p it ad j ac ent 
to xho door uril oc}; ing 
d evice . Tho •ttrp of tho 
ladder shall e x t end to a 
h e i g ht c onvenien t to 
unlocking t h e do or btrt shall 
not bo less t han 50 uiclic s 
ab o v e tho e n tr ance sill . 
A c c e s s to pits of el e vators 
■in mul t i p l e hoistways m-ay bo 
by means o-f a single 
h o is t' .^y d oo r arrd ladder , 
\ v ) Kuie i uu . I e arm Ktrxo 
1 06 . 1 f — Illumination of 
Pits arrd S t o p Gw i t ches -in 
Pi ts , Combine bo t h rules to 
re ad as f ollows ■ Th e p it 
ligh t swi tc h and tho p-tt 
s top s wi t ch shall bo 
ins t alled on the s-ano side 
ox' the p-rt access d oo r arrd 
s hall bo l o ca t ed adjacen t 
p it access ladder if a 
ladder irs provided . The pi t 
1 i g h t swi t ch s hall bo 
locat e d 42 incit es a b o v e tho 
xowosx hois t wa y do or sill 
whei e ac cess to tho p it xs 
p ro vid e d t hr o ugh "tho 
hois t way door . The pi t s t op 
shall bo loca t ed i2 inches 
abov e this sill . it ac ce ss 
to xho pi t is pxov-xdod 
t hr oug h a s ep ara te a cce s s 
do o r (walk -in pi t ) , t h e 
ligh t swi tc h and xho pit 
stop s wi t ch shall t h e n bo 
l oc a te d adjacen t to t h e l oc k 
3 amb s ide o-f the access door 
arrd b ot h shall bo 
app r ox in a t e 1 y n o rmal swi t ch 
lie igh t . Where acc e ss to xho 
pits of eleva t or s xn 
mul t iple h o istways is by 
means o-f a single acc e ss 
door , t h e s t op switch f o r 
each e leva tor shall bo 



loca t ed adjacen t to t h e 
n e a re st poin t o-f access to 
its pi t from th e access 
d oor . 

x+9-» HI Rule 110. 2a -- For 
Passenger Elevators and 
Freight Elevators Authorized 
to Carry Passengers. (A) 
Delete from the title the 
words: "and freight 
elevators authorized to 
carry passengers." (B) 
Delete items (4) and (5) of 
the contents . 

(11) ( 4 ) Access to Hoistways 

for E mergency Purposes . 

unlocking devices snal 1 bo 
ins t ax xod vn axi h o is t way 
d o o rs on all eleva t ors . Th e 
locat i on o-f t hes e devices 
shall no t exceed six fee t 
ton inches ver t ically ab o \ r e 
xho en t r ciitce sills . In the 
first sentence change the 
word "nay" to "shall" . 



l-2-r 15J. Rule 204. 2d ~ Side 
Emergency Exits. Side 
emergency exits shall not be 
permitted in elevator cars. 

(15) Rule £07x4 — Carrying 
of Passenger s on Freigh t 
Eleva t ors . Elimina t e 

e x c ep t i o n ( 2 ) . 

H4 3 Rul e 211.3 — Opera t i o n 
of Eleva tor s Under Fir e or 
O t he r E mergency Condit i o ns . 
Axhl a rro-fc-e a f t e r the t i t le 
to r e ad as- foll o ws : Note ■ 
Freight eleva t ors shall bo 
e xclu ded -from axi 
r equ ir emen t s o-f this Rul e . 

-HxH- Rate 300.2 — Hytrratrxxc 
Machine Ro or.s and f lachinei y 
S paces . Delete all parts of 
Rule 3002 . ( Ma c hine rooms 
■for hydraul ic elevators 
s hall co m p l y with Sec t ion 
101 . ) 

-HxH- RoTe 301 .7 — 6ar 

Enclosures . Ca r Doors and 
Ga t es and Car Illumina t ion . 
Tho e xc e p t i o n shall bo 
d e l ete d . (T op o-f car 
onc-rg en-cy e xi t s s hall bo 
requi r ed for axi oar 
encl o sures . ) 

■fixi Raio 301 .0 — Gar 

Saf e t ies . Car safe t ies may 
bo prov id e d conforming to 
now Rule 301.0 irf appr o ved 
im advance by the director . 

-HxH- Rtrio 301 ,2 e — Plung e r 
S top s . Plung e r s to ps shall 
bo t es t ed im acc o rdanc e with 
tho li t eral t ransla t i o n ox 
t l - i i s Rule . Pa r a g raph "-c-"- as 
added to Rul e 100.4 by 
Supplemen t A17 . la 1972 will 
not a'j pl y in N o rt h Ca r o lina . 

-f+9-r Raio 700. 1 — 

Applicab io R eq ui r em e nts . 
The p r o visions o-f Rule 101.3 
"Access to Machine Rooms arrd 



NORTH CAROLINA REGISTER 



519 



r" shall be 



bpa ce s' 
appli c abl e -to th 

-(-2-04 Rtrire 700.2 — Encl o su res 
for M a c hin e R oo ms and 
M achinery Spac e s . Add -the 
third p aragrap h "be "the rule 
trr re ad as f o ll o w s : 
Dumbwaiter control etflrtpwcrrt 
shall not- be ins t all e d -in 
hallways , passageways or any 
o c c upied space unless "they 
are installed flush wi t h -the 
wall . 

*g+» Rtrte 002.3 c — Cl e aranc e 
b et ween Dalus tr ades arrd 
S te ps . Chan ge rule "to rea d 
as f o ll o ws : The clearance 
on e i t h er sid e of t h e s t eps 
b et w ee n -the skir t g ua r d and 
•the s te ps shall n ot be m ore 
than 3/ ru inch » and fhe sthtt 
of ■bfte clearances on both 
s ides shall not be more titan 
1/4 inch . -(-No e x c ep t i o ns ) 

-(-234 Rrtie 004.111 — Sk irt 
Ob s t ruc t ion D evi c es . S kir t 
s wi t ch es shall be p rovid e d 
at the upp e r and lower e nds 
of the e s c ala tor . 

TITLE 15 - NATURAL RESOURCES 
AND COMMUNITY DEVELOPMENT 

Notice is hereby given in 
accordance with G.S. 150B-12 
that the Environmental 
Management Commission intends to 
amend regulation cited as 15 
NCAC 2B .0303(c) . 

The proposed effective date of 
this action is May 1, 1987. 



Statutory 
143-214.1 . 



Authority : 



G.S. 



The public hearing will be 
conducted at 7:00 p.m. on 
November 20, 1986 at Court Room, 
Transylvania County Courthouse, 
12 East Main Street, Brevard, 
North Carolina 28712. 



Comment Procedures : 
interested in this 
invited to attend, 
statements, data, 



All persons 

matter arc 

Comments , 

and other 



information may be submitted in 
writing prior to, during, or 
within thirty (30) days after 
the hearing or may be presented 
orally at the hearing. Oral 
statements may be limited to 
five (5) minutes at the 
discretion of the hearing 
officer. For further 

information or the submission of 
written comments, contact Bill 
Kreutzberger, DEM, P.O. Box 
27687, Raleigh, NC 27611, (919) 
733-5083. 

SUBCHAPTER 2B -SURFACE WATER 
STANDARDS: MONITORING 



SECTION .0300 ASSIGNMENT OF 
STREAM CLASSIFICATIONS 

.0303 LITTLE TENN RIVER BASIN 
AND SAVANNAH RIVER DRAINAGE AREA 

(c) The Little Tennessee River 
Basin and Savannah River 
Drainage Area Scheudle of 
Classification and Water Quality 
Standards was amended effective: 

(1 ) February 16, 1977; 

(2) March 1 , 1977; 

(3) July 13, 1980; 

(4) February 1, 1986; 

(5) May 1 , 1987. 



Notice is hereby given in 
accordance with G.S. 150B-12 
that the Environmental 
Management Commission intends to 
amend regulation cited as 15 
NCAC 2B.0305. 

The proposed effective date of 
this action is May 1, 1987. 



Statutory 
143-214.1 . 



Authority : 



G.S 



The public hearing will be 
conducted at 12:00 noon on 
November 21, 1986 at Seven 
Devils Town Hall, Town of Seven 
Devils, Route 1, Box 213, Banner 
Elks, North Carolina 28604. 

Comment Procedures: All persons 
interested in this matter are 
invited to attend. Comments, 
statements, data, and other 
information may be submitted in 
writing prior to, during, or 
within thirty (30) days after 
the hearing or may be presented 
orally at the hearing. Oral 
statements may be limited to 
five (5) minutes at the 
discretion of the hearing 
officer. For further 

information or the submission of 
written comments, contact Bill 
Kreutzberger, DEM, P. 0. Box 
27687, Raleigh, NC 27611, (919) 
733-5083. 

.0305 WATAUGA RIVER BASIN 
(c) The Watauga Basin Schedule 
of Classification and Water 
Quality Standards was amended 
effective : 
( 1 ) August 12, 1979; 

(2) February 1, 1986; 

(3) May 1 , 1987. 



Notice is hereby given in 
accordance with G.S. 150B-12 
that the Environmental 
Management Commission intends to 
amend regulation cited as 15 
NCAC 2B .0311 . 



520 



NORTH CAROLINA REGISTER 



The proposed effective date of 
this action is May 1, 1987. 



Statutory 
143-214. 1 . 



Authority i 



G.S. 



The public hearing will be 
conducted at 7:00 p.m. on 
November 17, 1986 at Bryan 
Auditorium, Morton Hall, UNC - 
Wilmington, 601 South College 
Road, Wilmington, North 
Carolina . 

Comment Procedures: All persons 
interested in this matter are 
invited to attend. Comments, 
statements, data, and other 



may 



be submitted in 
to, during, or 
(30) days after 
may be presented 
hearing . Oral 
be limited to 
minutes at the 
of the hearing 
For further 
or the submission of 
written comments, contact Bill 
Kreutzbcrger, DEM, P. 0. Box 
27687, Raleigh, NC, 27611, (919) 
733-5083. 



information may 
writing prior 
within thirty 
the hearing or 
orally at the 
statement s 
five (5) 
discret ion 
officer . 
inf ormat ion 



.031 

(b) 

Sched 

Water 

amend 

(1 

(2 

(3 

(4 

(5 

(6 

(7 

(8 

(9 

(10 

(11 



1 CAPE FEAR RIVER BASIN 

The Cape Fear Basin 
ule of Classification and 
Quality Standards was 
ed effective: 
) March 1, 1977; 

December 13, 1979; 



December 
August 9, 
April 1 , 
December 
January 1 
August 1 , 
December 
February 



14, 1980; 

1981; 
1982; 
1, 1983; 
, 1985; 

1985; 
1, 1985; 
1, 1986; 



May 1 , 1987. 



Notice is hereby given in 
accordance with G.S. 150B-12 
that the Division of Soil and 
Water intends to amend 
regulations cited as 15 NCAC 6C 
.0404; .0407 and adopt 6E .0101 
through .0108. 

The proposed effective date of 
this action is February 1, 1987. 



Statutory 
139-4(d); 
139-54(5); 
143-215.74; 
156-71 . 



Authority: G.S. 
139-25; 139-54(2) 
143-215.70 
143B-294; 156-61 



The public hearing will be 
conducted at 10:00 a.m. on 
November 14, 1986 at Ground 
Floor Hearing Room, Archdale 
Bldg., 512 N. Salisbury Street, 
Raleigh, N. C. 



Comment Procedures : Persons 
desiring to comment on the 
proposal are requested to give 
notice thereof on or before the 
hearing date. Any person 
desiring to present lengthy 
comments is requested to submit 
a written statement for 
inclusion in the record of 
proceedings at the public 
hearing. The record of 
proceedings will remain open for 
30 days following the hearing to 
receive additional written 
statements. Additional 

information concerning the 
hearing or the proposal may be 
obtained by contacting: Mr. 
Douglas Lewis, Division of Soil 
and Water Conservation, P.O. Box 
27687, Raleigh, North Carolina 
2761 1 , (919) 733-2302. 

SUBCHAPTER 6C - SMALL 
WATERSHED PROGRAM 

SECTION .0400 - SMALL 
WATERSHED GRANTS 

.0404 ENGINEERING FEES 
(a) State grants may cover up 
to fifty percent of the 
non-federal costs resulting from 
engineering fees and expenses, 
exc ept wh e n in c urr e d under 



qrants 


ma 


i 
V 


aw s . 
not 


however 
cover anv 


, state 
of the 


costs 


nr; 


sociat 


ed with D 


rainaqe 


District' 


s 


engineers fe 


es and 



expenses . 

(b) State grants may not 
cover any o-f th-e noil 



c os 

fee s 
■ t i 

w 1 1 11 



fed er al 

s resul t ing frxm e ngine e ring 

and e xpenses asso c ia t ed 



b e n t 



■e-t 
firb 



t he d e velopmen t o-f 

feasibility 
studi es or other planning work. 



(c) St 


at 


e qrants 


mav 


not 




cover 


cc 

d 


instruction 


insn 


ect ion 


provide 


bv the 


local s 


ponsor 


when 


in 


add it 


ion 


to 


that 


provide 


d 


bv 


th 


e 


Soil 



Conservation Service. 



.0407 CONSTRUCTION COST FOR 
WATER MANAGEMENT 
PURPOSES 

( a ) State grants may cover 

up to 66 2/3 percent 
construction costs for water 
management (drainage and 
irrigation), excluding all land 
rights acquisition costs. Th-e 
following art? c onsidered 
co ns tr uc t i o n cos t s for wa t er 
managemen t-r 

( 1 ) publ i c u t ili t i e s 

r e loca t ion or modifica t i o n 

cos t s ; and 
-(-24 p ubli c and priva t e 

road r e l o ca t ion or 

modifi c a t i o n c os t s . 

(b) The following are 



NORTH CAROLINA REGISTER 



521 



considered construction costs 
for water management : 

(1) public utilities 
relocation or modification 
costs; and 

(2) public and private 

road relocation or 

modification costs, 
(c) The following are not 
considered construction costs 
for water m an agement : 

(1) administrative c osts; 

(2) construction inspection; 
and 

( 3 ) legal fees . 



SUBCHAPTER 6E - AGRICULTURE 

COST SHARE PROGRAM FOR 

NONPOINT SOURCE 

POLLUTION CONTROL 

.0101 PURPOSE 

This document describes 
the operating procedures for the 
Division under the guidance of 
the Commission implementing the 
Agriculture Cost Share Program 
for Nonpoint Source Pollution 
Control. Procedures and 
guidelines for participating 
Districts are also described. 
The purpose of the voluntary 
program is to reduce the 
delivery of agricultural 
nonpoint source (NPS) pollution 
into the water courses of the 
state . 

.0102 DEFINITIONS FOR 
SUBCHAPTER 6E 

(a) Agriculture Nonpoint 
Source (NPS) Pollution means 
pollution originating from a 
diffuse source as a result of 
agricultural activities related 
to crop production, animal 
production units and land 
application of waste materials. 

(b) Allocation means the 
annual share of the state's 
appropriation to participating 
Districts . 

(c) Annual Agreement (AA) 
means a binding agreement 
between the District and the 
applicant that provides for cost 
sharing for installing best 
management practices and 
maintenance of the best 
management practices. 

(d) Applicant moans a 
person(s) who applies for best 
management practice cost sharing 
monies from the District. 

(e) Average Costs means 

the calculated cost, determined 
by averaging recent actual costs 
and current cost estimates 
necessary for best management 
practice implementation. Actual 
costs include labor, supplies, 
and other direct costs required 



for physical installation of a 
practice . 

(f) Best Management Practice 
(BMP) means a structural or 
nonstructural management based 
practice used singularly or in 
combination to reduce nonpoint 
source inputs to receiving 
waters . 

(g) Conservation Plan of 
Operation (CPO) means a written 
plan scheduling the applicant's 
decisions concerning land use, 
and both cost shared and 
non-cost shared BMP's to be 
installed and maintained on the 
operating unit. 

(h) Cost Share Agreement 
means an annual or long term 
agreement between the applicant 
and the District which defines 
the BMP's to be cost shared, 
rate and amount of payment, 
minimum practice life, and date 
of BMP installation. The 
agreement also states that the 
recipient will maintain and 
repair the practice(s) for the 
specified minimum life of the 
practice . 

(i) Cost Share Incentive 
(CSI) means a predetermined 
fixed annual payment paid to an 
applicant for implementing a BMP 
in lieu of a full 75/i cost 
share . 

(j) Cost Share Rate means 
a cost share percentage paid to 
an applicant for implementing 
BMP's. 

(k) Detailed implementation 
Plan moans the plan approved by 
the Commission that specifies 
the guidelines for the current 
Program Year; including, BMP's 
that will be eligible for cost 
sharing and the minimum life 
expectancy of those practices. 

(1) District BMP means 
a BMP designated by a District 
to reduce the delivery of 
agricultural NPS pollution and 
which is reviewed and approved 
by the Division to be 
technically adequate prior to 
funding . 

(m) Encumbered Funds means 
monies from a District's 
allocation which have been 
committed to an applicant after 
initial approval of the cost 
share agreement . 

(n) Full Time Equivalent 
(FIE) means 2.080 hours per 
annum which equals one full time 
technical position. 

(o) In-kind Contribution 
means a contribution by the 
applicant towards the 
implementation of BMP's. 
In-kind contributions shall be 
approved by the District and can 
include but not be limited to 
labor, fuel, machinery use, and 



522 



NORTH CAROLINA REGISTER 



acceptable supplies and 
materials . 

(p) Landowner means any 
natural person or other legal 
entity, including a governmental 
agency, who holds either an 
estate of freehold (such as a 
fee simple absolute or a life 
estate) or an estate for years 
or from year to year in land, 
but does not include an estate 
at will or by sufferance in 
land. Furthermore, a 

governmental or 

quasi-governmental agency such 
as a drainage district or a soil 
and water conservation district, 
or any such agency, by whatever 
name called, exercising similar 
powers for similar purposes, can 
be a landowner for the purposes 
of these rules if the 
governmental agency holds an 
easement in land. 

(q) Long Term Agreement 
(LTA) means a binding agreement 
between the District and the 
applicant that includes the plan 
of operation and which sets 
forth cost sharing for BMP 
installation and maintenance. 
The LTA shall have a maximum 
contract life of three years for 
BMP installation. The system 
installed must bring the soil 
loss to "T" and the District 
must perform an annual status 
review during the installation 
period . 

(r) Program Year means 
the period from July 1 through 
June 30 for which funds are 
allocated to Districts. 

(s) Proper Maintenance means 
that a practice(s) is being 
maintained such that the 
practice(s) is successfully 
performing the function for 
which it was originally 
implemented . 

(t) Soil Loss Tolerance 
(T) means the maximum allowable 
annual soil erosion rate to 
maintain the soil resource base, 
depending on soil type. 

(u) Strategy Plan means 
the annual plan for the N. C. 
Agriculture Cost Share Program 
for Nonpoint Source Pollution 
Control to be developed by each 
District. The plan identifies 
pollution treatment needs and 
the level of cost sharing and 
technical assistance monies 
required to address those annual 
needs in the respective 
District . 

(v) Technical Representative 
of the District means a person 
designated by the District to 
act on their behalf who 
participates in the planning, 
design, implementation and 
inspection of BMP's. These 



practices shall be technically 
reviewed by the Division. The 
District Chairman shall certify 
that the technical 
representative has properly 
planned, designed and inspected 
the BMP's. 

(w) Unencumbered Funds means 
the portion of the allocation to 
each District which has not been 
committed for cost sharing by 
the first Wednesday of March of 
the current fiscal year. 

.0103 ALLOCATION GUIDELINES 
AND PROCEDURES 

(a) The Commission will 
allocate the cost share funds to 
the Districts in the designated 
program areas. To receive fund 
allocations, each District 
designated eligible by the 
Commission is required to submit 
an annual strategy plan to the 
Commission at the beginning of 
each fiscal year . Funds may be 
allocated to each District for 
any or all of the following 
purposes: cost share payments, 
cost share incentive payments, 
technical assistance, or 
administrative assistance. Use 
of funds for technical and 
administrative assistance must 
follow the guidelines set forth 
in .0106 of this Subchapter. 

(b) Funds will be allocated to 
the Districts at the beginning 
of the fiscal year. Districts 
will be allocated monies based 
on the identified level of 
agricultural related nonpoint 
source pollution problems and 
the respective District's BMP 
installation goals and available 
technical services as 
demonstrated in the District 
annual strategy plan. The 
allocation method used for 
disbursement of funds is based 
on the relative position of each 
respective District for those 
parameters established by the 
Division and approved by the 
Commission. These parameters 
are designed to reflect the 
agricultural nonpoint source 
problems, the conservation 
needs, and the technical 
assistance available in the area 
of the State included in the 
current Program Year funding. 
Each District is assigned points 
for its relative position for 
each parameter and also for 
technical assistance hired under 
the 50:50 cost share (Rule .0106 
of this subchapter) and the 
points are totalled and 
proportioned to the total 
dollars available under the 
current Program year funding. 

( 1 ) Parameter Points + 



NORTH CAROLINA REGISTER 



523 



District Technical 

Assistance Points = Total 
Points 

(2) Percentage Total Points 
Each District x Total 
Dollars Available = 
Dollars Available to Each 
District 

(3) Because of other program 
restraints or increased 
demands for funds a District 
may request fewer (Group A) 
or more (Group B) dollars 
than are available . 

Thus , 

Dollars Available Per 

District, (2) - Dollars 

Requested by the District = 

Difference 

(A) Group A Districts 
request less than amount 
(2) . 

(B) Group B Districts 
request more than amount 
(2). 

(4) The dollars in excess of 
Group A District requests 
are apportioned to group B 
Districts in the following 
manner : 

Total of Those Funds in 
Excess of that Requested by 
Group A Districts x 
Percentage of Total Excess 
Requests by each Group B 
District = Amount Added to 
Group B Request 

(5) Therefore, there are two 
categories of Districts in 
the allocation method; 

(A) Those receiving 100 
percent of request (Group 
A). 

(B) Those receiving less 
than 100 percent of 
requests (Group B) who 
receive amounts (2) plus 
( 4 ) . 

(c) Ninety-five percent of the 
total program funding will be 
allotted to the District 
accounts in the initial 
allocation. The Division will 
retain 5 percent of the total 
funding in a contingency fund to 
be allocated at a later date as 
determined by the Commission. 

(d) Cost share funds allocated 
to a District during a fiscal 
year that have not been 
encumbered to an agreement by 
the first Wednesday of March of 
that fiscal year will be subject 
to recall by the Commission. 

(e) Districts with 
unencumbered funds as of the 
first Wednesday of March of the 
current fiscal year may request , 
in writing to the Commission, to 
retain those funds. Requests 
must be received by the 
Commission, to retain those 
funds. Requests must be 
received by the Commission no 



later than the second Wednesday 
of March of the current fiscal 
year . 

(f) Districts may apply for 
additional funds to the 
Commission by written 
application to be received no 
later than the second Wednesday 
in March. 

(g) The amount of recalled 
funds shall be divided among the 
eligible Districts applying for 
reallocation based on projected 
needs as outlined in the written 
applications received by the 
Commission as stated in Rule 
.0103(e) of this subchapter. 

The Division will notify the 
Commission by the third 
Wednesday in March of the 
current balance of funding and 
the District's requests to 
retain present allocation and/or 
to obtain new funds. The 
Commission shall decide the 
amount of funds reallocated to 
each District and the District's 
will be notified of their final 
allocation by the fourth 
Wednesday of March. 

(h) CPO's that encumber funds 
under the current year must be 
submitted to the Division by 
9:30 a.m. on the first Wednesday 
in June . 

.0104 BEST MANAGEMENT 

PRACTICES ELIGIBLE FOR 
COST SHARE PAYMENTS 

(a) BMP's eligible for cost 
sharing will be restricted to 
those BMP's listed in the 
Detailed Implementation Plan 
approved by the Commission for 
the current Program Year . 

(b) BMP definitions and 
specifications are set forth 
periodically in the USDA-Soil 
Conservation Service Technical 
Guide, Section IV., Raleigh, 
North Carolina or by the 
Division for District BMP's. 
BMP specifications appropriate 
for the current Program Year 
shall be met or exceeded in 
order for an applicant to 
qualify for cost sharing. 
Provisions for exceeding BMP 
design specifications by an 
applicant should be considered 
at the time of application with 
the District. The applicant 
shall assume responsibility for 
all costs associated with 
exceeding BMP design 
specifications . 

(c) The minimum life 
expectancy of the BMP's shall be 
listed in the Detailed 
Implementation Plan. Practices 
designated by a District shall 
meet the life expectancy 
requirement established by the 
Division for that District BMP. 



524 



NORTH CAROLINA REGISTER 



.0105 COST SHARE AND INCENTIVE 
PAYMENTS 

(a) Cost share and incentive 
payments can be made through 
LTA's or AA's between the 
District and the applicant. It 
shall be the policy of the 
Commission to encourage the use 
of LTA's over the use of AA's. 

(b) For all practices except 
those eligible for CSI , the 
state will provide 75 percent 
and the applicant 25 percent of 
the average cost for BMP 
installation. In-kind 
contributions by the applicant 
shall be included in the 
applicants' cost share 
contribution. In-kind 
contributions shall be specified 
in the agreement for cost 
sharing and shall be approved by 
the District . 

(c) Payments for BMP's 
restricted to the CSI shall be 
limited to a maximum of three 
years per farm. 

(d) Average installation costs 
for each comparative area or 
region of the state and the 
amount of cost share incentive 
payments will be updated and 
revised annually by the Division 
for approval by the Commission. 

to) The maximum total cost 
share payments to an applicant 
shall be limited to $15,000 per 
year. Additional payments may 
be made based on a District's 
request to, and approval by the 
Commission . 

(f) Cost share payments to 
implement BMP's under this 
program can be combined with 
other funding programs, as long 
as the combined cost share rate 
does not exceed the amount set 
forth in Rules .0105 (b) and (e) 
of this subchapter. 

(g) Use of cost share payments 
is restricted to land located 
within the county approved for 
funding by the Commission. In 
the situation where an 
applicant's farm is not located 
solely within a county, the 
entire farm, if contiguous, will 
be eligible for cost share 
payments . 

(h) Cost share payments shall 
not be used on or for local , 
state or federal government land 
unless approved by the 
Commission . 

.0106 TECHNICAL ASSISTANCE 
FUNDS 

(a) The funds available for 
technical assistance shall be 
allocated by the Division based 
on needs as expressed by the 
District and needs to accelerate 
the installation of BMP's in the 



respective District. Each 
District may use these monies to 
fund new positions or to 
accelerate present technical 
assistance positions. A maximum 
of $15,000 of N. C. Agriculture 
Cost Share program funds may be 
used per FTE technical position 
with the District matching 50 
percent of the total position 
cost in order to qualify. 
Priorities for funding positions 
are assigned based on the rating 
system as follows: 

(1) Position presently funded 
by program technical 
assistance funds . . 50 pts. 

(2) Position needed in 
District not presently 
receiving technical 
assistance monies 

(A) Position needed to 
qualify for cost share 
allocation .... 15 pts. 

(B) Position needed to 
further accelerate program 

10 pts. 

(3) Position needed to 
further accelerate Program 
in District presently 
receiving technical 
assistance monies for 
another position . . .5 pts. 

C4) Position needed to 

further accelerate treatment 
of identified critical 
non-point source pollution 
problem (i.e., intense 
animal waste, PNA drainage 
area, Nutrient Sensitive 
Watershed, etc.) . 15 pts. 

(b) Technical assistance 
funds may be used for salary, 
benefits, social security, field 
equipment and supplies, office 
rent, office equipment and 
supplies, postage, telephone 
service, travel and mileage. A 
maximum of $2,500 per year for 
each FTE technical position is 
allowed for mileage charges. 

(c) Minimum requirements for 
technical positions shall be one 
of the following: 

(1) associated degree in 
engineering, agriculture, 
forestry or related field, 
or 

(2) high school diploma with 
two years experience in the 
fields listed in Rule .0106, 
(c), (1), of this subchapter 
or 

(3) appropriate experience in 
the fields listed in Rule 
.0106, (c), (1) of this 
subchapter . 

Cd) Cost shared positions must 
be used to accelerate the 
Program activities in the 
District. A district technician 
cost shared with Program funds 
may work on other activities as 
delegated by the field office 



NORTH CAROLINA REGISTER 



525 



supervisor but the total hours 
charged to the Program by field 
office personnel must equal or 
exceed those hours funded 
through the Program. Also, 
these hours must be in addition 
to those hours normally spent in 
BMP planning and installation by 
District personnel . 

(e) District technicians may 
be jointly funded by more than 
one District to accelerate the 
Program in each participating 
District. Each District must be 
eligible for cost sharing in the 
Program. Requests for funding 
(salary, FICA, insurance, etc.) 
of a shared position must be 
presented to the Division by all 
concerned Districts and the 
Division will cost share to the 
billing District at a 50-50 rate 
based on the portion of the FTE 
provided each respective 
District. A shared position 
must be officially housed in one 
specific District and cost share 
for support items (office rent, 
telephone, etc.) will be paid to 
one District only. 

(f) Funds, if available, will 
be allocated to each 
participating District to 
provide for administrative costs 
under this program. These funds 
shall be used for clerical 
assistance and other related 
program administrative costs and 
will be matched with in-kind 
funds of an equal amount from 
the District . 

.0107 COST SHARE AGREEMENT 

(a) The landowner shall be 
required to sign the agreement 
for all practices other than 
conservation tillage and land 
application of animal wastes. 
An applicant who is not the 
landowner may submit a long term 
written lease or other legal 
document indicating control over 
the land in lieu of the 
landowners signature, provided 
the control runs the length of 
the LTA. Signature on the 
agreement constitutes 
responsibility for BMP 
maintenance and continuation. 

(b) As a condition for 
receiving cost share and/or cost 
share incentive payments for 
implementing BMP's. the 
applicant shall agree to 
continue and maintain those 
practices for the minimum life 
as set forth in the Detailed 
Implementation Plan, effective 
the date the BMP's are 
implemented . 

(c) As a condition for 
receiving cost share payments, 
the applicant shall agree to 
submit a soil test sample for 



analysis and follow the 
fertilizer application 

recommendations as close as 
reasonably and practically 
possible. Soil testing shall be 
required a minimum of every two 
years on all cropland affected 
by cost share payments. Failure 
to soil test shall not 
constitute noncompliance with 
the cost share agreement . 

(d) As a condition for 
receiving cost share payments 
for waste management systems, 
the applicant shall agree to 
have the waste material analyzed 
once every year to determine its 
nutrient content. If the waste 
is land applied, the applicant 
shall agree to soil test the 
area of application and to apply 
the waste as close as reasonably 
and practically possible to 
recommended rates. When waste 
is land applied, waste analysis 
and soil testing shall be 
conducted annually. 

(e) The technical 
representative of the District 
shall determine if the 
practice(s) implemented have 
been installed according to 
specifications as defined for 
the respective Program Year in 
the USDA-Soil Conservation 
Service Technical Guide, Section 
IV, Raleigh, North Carolina, or 
according to specifications 
approved by the Division for 
District BMP's. The District 
shall be responsible for making 
an annual spot check of five 
percent of all the participating 
farms to ensure proper 
maintenance. Waste management 
systems will receive annual 
status reviews for five years 
following implementation. 

(f) If the technical 
representative of the District 
determines that practice(s) for 
which cost sharing was received 
have been destroyed or have not 
been properly maintained, the 
farmer will be notified that the 
cost shared practices must be 
repaired or reimplemented within 
one calendar year. 

(g) If the practices are not 
repaired or reimplemented within 
the specified time, the 
applicant shall be required to 
repay to the Division a prorated 
amount as shown in Table 1 
and/or 100 percent of the cost 
share incentive payments 
received during the current 
fiscal year. 

Table 1 

PRORATED REFUND SCHEDULE FOR 

NONCOMPLIANCE OF COST SHARE 

PAYMENTS 



526 



NORTH CAROLINA REGISTER 



Age 


of P 

1 

2 
3 

5 
6 
7 
8 
9 
10 


rac 


t 


ice 


P 


erccnt Refund 
100 
95 

89 
82 
74 
65 

55 
44 
31 
17 




(h) An applicant who has been 
found in noncompliance and who 
does not agree to repair or 
reimplement the cost shared 
practices shall have the right 
to appeal to the District. 
Appeals must be received by the 
District within 30 days of 
issuance of the notice of 
noncompliance. The Districts 
have 60 days to respond to 
appeals. In situations in which 
the applicant and the District 
continue to disagree after the 
appeals process, both parties 
may within 30 days of the 
district appeal decision jointly 
request the Commission 
informally review the case. To 
invoke this method of review, 
both parties must stipulate that 
the Commission decision is 
binding and that all further 
reviews and appeals are waived 
and abandoned. 

(i) An applicant shall have a 
maximum of 180 days to make 
repayment to the Division 
following the final appeals 
process . 

(j) The inability to properly 
maintain cost shared practices 
or the destruction of such 
practices through no fault of 
the applicant shall not be 
considered as noncompliance with 
the cost share agreement . 

(k) When land under cost 
share agreement changes owners 
the new landowner shall be 
strongly encouraged by the 
District to continue and 
maintain practice(s) previously 
implemented . 

.0108 DISTRICT PROGRAM 
OPERATION 

(a) As a component of the 
annual strategy plan developed 
by each District, both cropland 
and animal operations will be 
prioritized according to 
pollution potential. Technical 
and financial assistance will be 
targeted to facilitate BMP 
implementation on the identified 
critical areas. 

(b) Priority by the 
District may be given to 
implementing systems of BMP's 



which provide the most cost 
effective reduction of nonpoint 
source pollution. 

(c) All applicants shall 
apply to the District and 
complete the necessary forms in 
order to receive cost share 
payments . 

(d) The District shall review 
each application and the 
feasibility of each application. 
The District shall review and 
approve the evaluation and 
assign priority for cost 
sharing. All applicants shall 
be informed of cost share 
approval or denial. 

(e) Upon approval of the 
application by the District, the 
applicant and the District shall 
enter into a cost share 
agreement . The cost share 
agreement shall list the 
practices to be cost shared with 
state funds . The agreement 
shall also include the average 
cost of the recommended 
practice(s), cost incentive 
payment of the practicc(s), and 
the expected implementat ion date 
of the practice(s). CPO's will 
be developed r.nd become a part 
of the cost share agreement . 

(f) Upon completion of 
practice(s) implementation, the 
technical representative of the 
District shall notify the 
District of compliance with 
design specifications. 

(g) Upon notification, the 
District shall review the CPO . 
Upon approval, the District 
shall certify the practices in 
the CPO and notify the Division 
to make payment to the 
applicant . 

(h) Upon receipt of a 
quarterly statement from the 
District, the Division shall 
reimburse to the District the 
appropriate amount for technical 
and clerical assistance. 

(i) The District shall be 
responsible for and approve all 
BMP inspections as set forth in 
Rule .0107, (e) of this 
subchapter to insure proper 
maintenance and continuation 
under the cost share agreement . 

(j) Districts shall provide 
quarterly reports on program 
accomplishments to the 
Commission on October 15, 
January 15, April 15 and an 
annual report on July 15. 

(k) The District will be 
responsible for keeping 
appropriate records dealing with 
the program. 



Notice is hereby given in 



NORTH CAROLINA REGISTER 



527 



accordance with G.S. 150B-12 

that the Wildlife Resources 

Commission intends to amend 

regulation cited as 15 NCAC 10F 
.0314. 

The proposed effective date of 
this action is February 1, 1987. 

Statutory Authority: G.S. 75A-3; 
75A-15. 

The public hearing will be 
conducted at 9:00 a.m. on 
November 17, 1986 at Room 386, 
Archdale Building, 512 N. 
Salisbury Street, Raleigh, North 
Carolina . 

Comment Procedures: Interested 
persons may present their views 
either orally or in writing at 
the hearing. In addition, the 
record of the hearing will be 
open for receipt of written 
comments from October 20, 1986, 
to 5:00 p.m. on November 21, 
1986. Such written comments 
must be delivered or mailed to 
the Wildlife Resources 
Commission, 512 N. Salisbury 
Street, Archdale Bldg., Raleigh, 
NC 27611. 

CHAPTER 10 - WILDLIFE RESOURCES 
AND WATER SAFETY 

SUBCHAPTER 10F - M0T0RB0ATS AND 
WATER SAFETY 

SECTION .0300 - LOCAL WATER 
SAFETY REGULATIONS 

.0314 NEW HANOVER COUNTY 

(a) Regulated Areas. This 
Rule applies to the following 
p or t ion;, of Drad ltry C r ee k, - L e e' s 
Cu t , M o tts C hann e l and -the 
In t racoas t al Wa t erway waters in 
New Hanover County: 

(5) that part of Myrtle Grove 
Sound at the Dolphin Bay 
boat docks extending 150 
yards to either side of 
Intracoastal Waterway marker 
No. 157. 

(b) Speed Limit. No person 
shall operate a vessel at 
greater than no-wake speed 
within any of the regulated 
areas described in Paragraph (a) 
of this Rule. 



Notice is hereby given in 
accordance with G.S. 150B-12 
that Division of Economic 
Opportunity intends to amend 
regulation cited as 15 NCAC 16D 
.0201 . 

The proposed effective date of 
this action is February 1, 1987. 



Statutory Authority: G.S. 
113-28.21, et seq.; 143B-10(b). 

The public hearing will be 
conducted at 10:00 a.m. on 
November 14, 1986 at fifth floor 
conference room, Archdale Bldg., 
512 N. Salisbury Street, 
Raleigh, N.C. 

Comment Procedures: All persons 
interested are invited to 
attend. Comments may be 
submitted in writing or may be 
presented orally at the hearing. 
Oral presentations which exceed 
three minutes are requested to 
have a written copy to be filed 
with the hearing clerk. Further 
details of the proposed change 
may be obtained by writing or 
calling: Mr. James Forte, 
Director, Div. of Economic 
Opportunity, P. 0. Box 27687, 
Raleigh, NC 27611, (919) 
733-2633. 

CHAPTER 16 - DIVISION OF ECONOMIC 
OPPORTUNITY 

SUBCHAPTER 1 6D - COMMUNITY 
ACTION PARTNERSHIP PROGRAM 

SECTION .0200 - ADMINISTRATIVE 
POLICIES AND PROCEDURES 

.0201 GENERAL PROVISION 

(c) A maximum of fifty percent 



of 



funds 



allocated 



to 



eligible agency may be used to 



d efray 



the 



administrative 



e xpense of programs other tha n 
those operated with Community 
Se rvices Block Grant funds. 
Such programs must have purposes 

consiste nt wit h th ose of the 

Com mu nit.y Services Block Grant . 

Ad ministrative expense of other 
programs shall include direct or 
indirect costs associated with 
general management and support 
functions of a specific program 
or project. Such costs must: 
( 1 ) be necessary and 

reasonable for the proper 
and efficient administration 
of the program or project; 
(2) conform to any 

limitations or exclusions 



set 



forth 



this 



Subchapter; 
(3) be accorded consistent 



treatment 



throu gh 



application of generally 

accepted accounting 

principles appropriate to 
the circumstances; and 
(4) not be allocable to or 
i ncluded as a cost to a ny 
other progr nm f inanced with 
federal, state, or loca l 
funds in either the current 
or a prior period. 



528 



NORTH CAROLINA REGISTER 



TITLE 20 



STATE TREASURER 



Notice is hereby given in 
accordance with G.S. 150B-12 
that the Local Government 
Commission intends to amend 
regulation cited as 20 NCAC 3 
.0703. 

The proposed effective date of 
this action is March If 1987. 



Statutory Authority: 
159-30(c) (6c). 



G.S. 



The public hearing will be 
conducted at 10:00 a.m. on 
November 19. 1986 at Conference 
Room, Room 100. Albemarle 
Building, 325 N. Salisbury 
Street, Raleigh, North Carolina. 

Comment Procedures: Persons 
making oral presentations must 
provide written copy of comments 
to Hearing Officer. Written 
comments sent to AFA 
Coordinator, Department of State 
Treasurer, 325 N. Salisbury 
Street, Room 100, Raleigh, North 
Carolina 27611 until November 
19, 1906. 



CHAPTER 3 



- LOCAL GOVERNMENT 
COMMISSION 



SECTION .0700 - MUTUAL FUND FOR 
LOCAL GOVERNMENT INVESTMENT 

.0 703 MINIMUM FUND STANDARDS 
(a) Moneys of the fund may 
be invested only in securities 
permitted by G.S. 159-30. The 
nnxiimim maturity of any security 
purchased shall rrcrt e xceed +& 
month's f r on ti*te dat e of purchase 
he set by the Secretary for each 
portfolio, provided that the 
m aturity shall not exceed seven 
(7) years. 



TITLE 21 



LICENSING BOARDS 



Notice is hereby given in 
accordance with G.S. 150B-12 
that the Board of CPA Examiners 
intends to adopt and amend 
regulations cited as 21 NCAC 8F 
.0302; 8F .0305; 8F .0401 and 21 
8F .0402. 

The proposed effective date of 
this action is April 1, 1987. 



Statutory Authority: 
93-12(3); 93-12(5). 



G.S. 



The public hearing will be 
conducted at 9:00 a.m. on 
December 17, 1986 at N. C. State 
Board of CPA Examiners, 1101 
Oberlin Road, Suite 104, 
Raleigh, NC 27605. 



Comment Procedures: Any person 
interested in this rule may 
present written or oral comments 
relevant to the action proposed 
at the public rule-making 
hearing. Anyone planning to 
present comments at the hearing 
should notify the Executive 
Director at the Board offices by 
Monday, December 15, 1986. 
Written statements not presented 
at the public hearing should be 
delivered to the Board offices 
not later than 12:00 noon on 
Friday, January 16, 1987. 

SUBCHAPTER 8F - REQUIREMENTS FOR 

CERTIFIED PUBLIC ACCOUNTANT 

EXAMINATION AND CERTIFICATE 

APPLICANTS 

SECTION .0300 - EDUCATIONAL 
REQUIREMENTS FOR EXAMINATION 

.0302 EDUCTION 

(a ) Each appl i c an t mtrsi submi t 
proof, acceptabl e to the b o ard , 
"in the form of college or 
universi t y ti anscr ip t s , t ha t ho 
has suc c essfully c o m pl et ed . or 
shall c o mpl e te nt tire e n d o-f t h e 
school t crrii wh ich begin s before 
■tito c xa in ina t i o n da te , at l e as t 
6*0 semester hour s course work or 
the eq uivalen t ntmbcr of q ua rter 
h o u r s ■ -in a co lleg e or 
ins t i t u t i o n of high er learning 
accredited by one of the 
regional associa t ions 

acc r edi t in g institu t i o ns of 
higher educa t i o n . 

( b ) fn addi ti on, e ach 
ap p lican t nrtrsf submit proof, 
acce pt abl e to -the b o ard , in the 
for m of coll e ge or uni v ersity 
t ranscrip t s , thai he has 
success fuli y comple t ed a c ourse 
of stud y in accoun t ancy at t h e 
end of the s chool te rm which 
be gins before -the examina t ion 
dote-r A c o urs e of st udy -in 
ac co un t an c y s hall consis t of a 
mi numu m of 24 s em e s t e r hours, or 
tire e quival ent -im quar t e r h o urs ■ 
which shal l in c lud e "the 
f ol low ing ■ 

( 1 ) fotrr cours e s in 

( 2 ) one c o u r s e in cos t 
anuuullug, 

( 3 ) o n e course in 
audi t in g ■ and 

( 4 ) one course in income t ax . 
-f-c4 S uch co u r s e of study in 

w hil e e nr o ll e d in arty of the 
sc h oo ls : 
Any co lle g e or university 
a cc r r di t ed by the Southern 
Asso c ia t i o n of C o ll ege s and 
Sch oo ls , or c o mpa r abl e 
re gi o nal accredi t ing 

asso c iat ion ; 
(2 ) any memb e r school of the 



NORTH CAROLINA REGISTER 



529 



Amcr ican Ass e mbly o-f 
Cullegia t c Schools of 
Dusincss ; 
(3 ) any m e mbe r uni vers i t y o-f 
■the Association trf American 
U ni v ersi t ies , or university 
extension courses rrmi 
corr e sp o ndenc e s c hools which 

the b o ard, -in wri t ing; or 
4-4^ any ot h er scho o l ; c o lle ge 
or universi t y sp e cificall y 
ap p r o ved by the b o ard in 
writing . 
4tr> An applican t who has 
comple t ed "the requiremen t s trf 2+ 
tfSfte frF .0302(a) and -ttr* at a 
school which d o es not nreetr t he 
requirements trf &+ NCAC 8-F 
. 0302( c ) shall Ire de em ed -to have 
completed said requirements a-t a 
s c h o ol , c o lle ge or universi t y 
appr o ved by the b o £. r d by 

co mpl e ti o n at a school meeting 

i t , , , . ; , t r g 1 >.T h * n n c 

TJie l c q u l L e hi e n T s ox ztt rrOKU trr 

■0302(c)(1 ), *2-» trr 43-J- o-f an 

addi t i o nal +5 sem e ster hours , trr 

t+re e quivalen t -in quarter hours ■ 

including six semes t er hours, trr 

the e quival e n t in qua rte r h o urs , 

o-f co urses in a cco un t ing . 

(a) G.S. 93-12(5) provides 

for three ways to demonstrate 



mentioned 



(a) 



above 



selected by the applicant, the 
completion of two years in a n 
a ccredited college or university 
or its equivalent shallme-jn that 
t he applicant has successfully 
completed, or reasonably expect s 
to complete at the end of the 
school term which begins before 
th e examination date, at least 
60 semester hours of couse work. 
or the equivalent in quarter 
hours, in a school, college or 
university accredited by one of 



the 



regional 



accrediting 



associations . 



The 60 semester 



hours 



shall 



include 



the 



concentration 



in 



accounting 



described in 21 NCAC 8F .0305, 
However, if the applicant fails 
to complete the necessary 60 



semester 



hours 



within 



the 



specified time, the grades shall 
not be awarded. 
( e ) A regional accrediting 



assoc iat ion 



includes 



the 



Southern Association of Colleges 



Schools 



and 
accrediting 



and 



comparable 
associat ions as 



indicated 



the 



Education 



Directo ry 



Colleges 



and 



Universities, which is published 



the 



by th e 



U 



S . Department of 



education . 



possession of adequate E ducation, National Center for 



includes the possession of 



approach Education Statistics. Colleges 



and 



universit ites which are 



bachelor's degree, 



second 



approach includes two years of 
college, plus experience in the 
public practice of accountancy 
under the direct supervision of 
a certified public accountant. 
The third approach is to take 



members of the American Assembly 

of Collegiate Schools of 

Business are deemed to have 



standards 



equivalent 



to 



substantially 



regionally 



the 



special 



examinations 



approved by the Board 



and 



accredited institution. 

(f) A concentration in 
accounting shall be completed 



described in 21 NCAC 8F .0304. 

(b) Each applicant not 
applying under 21 NCAC 8F .0304 
must submit transcripts to prove 



prior 



to 



the 



date 



of 



that 



the 



educational 



requirements have been met. 
Transcripts shall show grades 
received on all courses 



completed and 



all 



degrees 



awarded. An official transcript 
boars the seal of the school and 



the 



or o 

~(c)~ 



a ppl 
exam 
a war 
and 



signatu r e of the r e gj s trat 
ther a p pro pri ate o [ f i cin 1 . 
The b oa t d may a pp rove a n 
icat ion i o take the 



p rior 



to 



the 



in at ion 

din g of a bachelor ' s degree. 



prior 



to 



any 



work 



application. However, the board 
may approve an application to 
take the examination if the 
applicant reasonably expects to 
complete the concentration in 
accounting at the end of the 
school term which begins before 

the examination date. If the 

applicant fails to complete the 
co ncentration in accountanc y 

with in t he specified time, the 

_q rades shall n ot be awa rded . 

So e Rj 1 1 c . 030 5 b ej o w for a 

d o f i nit ion of co n ccntra t ion in 

£*_ c .? °_i !12 ting. 

( g ) A n app lic ant who lias 

conploted the bachelor's degree 



the 



concentration 



experience , 



if the applicant a ccounting at 



school which 



reasonably expects to receive does not meet the requirements 
such a degree within 90 days of G.S. 93-12(5) and paragraph 
after the last day of the (e) of this Rule shall be deemed 



examination ■ 



however > 



if the 



to 



have 



applicant fails to receive the requirements 



completed 



the 



at 



school , 



degree within the specified college or university approved 



time, the grades shall not be 
awarded . 
(d) If the second approach 



by the board h\ 

(1 ) completion, at a school 
meeting the requirements of 
paragraph (e) of this Rule, 



530 



NORTH CAROLINA REGISTER 



o f 10 addit ional semester 



hours 



(or equivalent) of 



traduate courses, includ ing 
;ix semester hours (or 



cquivnl ent ) 



acco u nt in q courses 



enrollment for 



grad u ate 

p ius 



advanced 



degree ; or 
(2) com p letion, at a school 
m eeting the requirements of 
paragraph (e) of this Rule, 
of 15 additional semester 
hours (or equivalent) or 



undergraduate 



courses . 



i ncluding six semester hours 
( or equivalent ) in 



undergraduate 



account ing 



courses , 



.0305 CONCENTRATION IN 
ACCOUNTING 

(a) A concentration in 
accounting shall include: 

(1) at least 24 semester 
hours, or the equivalent in 
quarter hours, of 
undergraduate accountancy 
courses; or 

(2) at least 16 semester 
hours or the equivalent in 
quarter hours, of graduate 
accountancy courses; 
provided, that a graduate 
level course is defined as 
one open exclusively to 
graduate students; or 

(3) a combination of 
undergraduateand graduate 
courses which would be 
equivalent to (1) or (2). 

(b) In recognition of 
differences in the level of 
graduate and undergraduate 
courses, one semester (or 
quarter) hour of graduate study 
in accountancy will be 
considered the equivalent of one 
and one-half semester (or 
quarter) hours of undergraduate 
study in accountancy. 

(c) Up to six semester hours, 
or the equivalent in quarter 
hours, of the 24 semester hour 
requirement may be accepted from 
income tax courses completed in 
law schools . 

(d) In cases where an 
accountancy course duplicates 
another course previously taken, 
only the semester (or quarter) 
hours of one of the courses will 
be counted in determining if the 
applicant has met the 
requirements of this Rule in 
satisfactorily completing a 
course of study in accountancy. 

(e) If an applicant does not 
possess a bachelor's degree, or 
does not expect to receive such 
a degree within 90 days after 
the last day of the examination, 
then the applicant's 
concentration in accounting 
shall include; 



( 1 ) four courses in 
principles of accounting, 

(2) one course in cost 
accounting , 

(3) one course in auditing, 
and 

(4) one course in income tax. 

SECTION .0400 - EXPERIENCE 

.0401 GENERAL EXPERIENCE 

REQUIREMENTS 
( a ) Each applicant mtrs-t submi t 
proof, accep t able to t he f oard, 
in t he form trf im experience 
af f idaci t that h-e htrs Iratl 
either • 

( 1 ) two years experienc e in 
the field trf accoun t an c y 
under t he direc t , 
supervision o-f a cer t ified 
publ ie accoun t ant ; or 
-(-2-)- Five years experienc e 

t eaching accounting courses 
srs described in 2i N6A6 frP 
,0409 -r or 
4o-> five y ear s experienc e in 
theprac t ic e trf accoun t ancy; 
err 
4-4-r a c o m bina t ion o-f 



experi e nce 
consis t of 
yea r s for 
l e ss t han 



which shall 

a t o t al o-f five 

persons havin g 

■btro years o-f 

unde r t+re direct 

o-f a certified 



experi e r.ee 

suprvisicn 
public accoun t an t ■ 
(b ) A pplican ts no t meeting t he 
educational requirements s t ated 
in 2+ HCAo ftF . 0402 shall htrve 
t w o years experience irt t he 
pi ac t ice of p-c blic accoun t ancy 
unde r the direc t supervision of 
a cer tified ptrbi-rc accoun t ant in 
addi t ion to bho ot her e xperience 

in 2i 



r equir c m e nts 
NGA€ ©F .0401 (a) . 

( c ) a mas t ers or more advanced 
d egree im accoun t ing, "ttrx lav;, 
economics or business 
a-dn m ist i' at ion from an 
accredited coll e g e or universi t y 
crs pro v ided in 2+ N€A€ frF 
— 0302(c) itra-y bo subs t ituled -for 
o ne year o-f tbe e xp e ri e n ce 
r equir e men t spe c ified in 2+ N6A6 
OF .0401 (a) . 
( d ) Th-e board will accept 

6-0-& h o u r s of p art — time 

a pe riod 

cts the 

year ox 



experience 

exceeding 
equivalen t 
e xp e ri e n ce . 
e .xpcr i e iive 



worked in 

+2 months 

ro one 



which totals less 



than +T 6-9-0 hours will not- be 
ac c ep t ed by the board . A p e r s o n 
wo r kin g l e ss than 3-5 hours p-er 
w ee k shall fcre dee me d "to be 
working par t — t ime . Temp or ary 
empluy meiit shall moan working 3-5 
hour s or mo r e p-cr week and shall 
be c o un te d in full . 
( e ) Supervision shall m e an 



NORTH CAROLINA REGISTER 



531 



the po w er 
decision 

o bj e c t ives 
s t ewardship ; 
d e legat e d by 



having jurisdic t i o n (i.e. 
o v e rsigh t auth or i t y lover the 
pro ce ss trf planning , 
coordina t ing, g uiding, 

inspe ct ing, c o n tr olling , and/ or 
e valua t ing on a c o ntinuing basis 
t h e activi t i e s am! 
accompl ishments of the e mpl o yee 
tn id cr hi s or h er command; havin g 
o-f direc t i o n and 
■in implementing 
tro meet t lie 
of- his or her 
havin g a uth or ity 
highe r m anage ment 
■to hire , tr ansfer , suspend, 
recall , pr o mote , assign, or 
discharge an employee unde r his 
err her charge or -to r ec omm e nd 
such a ct i o n t h r ough -the pr o per 
administrat ive c hain o-f c o mmand . 
Direc t sup e rvisi o n shall mean 
the p e rson su per vis e d is n e xt 
h e lo t? in -the trs-aai lin e of 
sutho r i t y or is in a st aff 
position r ep or ting -to the 
supervisor . Direc t supervision 
also m e ans a cl e ar — cu t personal 
c o nne c t ion to -tire e mpl oy ee bein g 
sup e rvised , m a r ked by a 
fi r s t — hand ass o cia t io n wi t h o u t 
^m interv e nin g po si t i on of 
influ e n ce 
(a) G.S 



93-12(5) lists 



experience requirements require d 



of all applicants for 



CPA 



certificate . 



21 NCAC 8F .0402 



indicates the experience that is 
required prior to applying to 



take the CPA examination, 



NCAC 



8F 



.0409 



describes 



acceptable teaching experience. 

(b) A masters or more advanced 
degree in accounting, tax law, 
economics or 



business 



administrat ion 



from 



an 



accredited college or un ive rsity 
as provided in 21 NCAC 8F 



■0302(e) may be substituted for 



year 



of the 



experience 



r equirem e nt specified in 21 NCAC 
8K .0401(a). no other d eg rees 
m ny be u s ed as su b sti tu tes for 
th e ex perien ce re qi l ircmont . 
( <- ) The b o ard wi l l ace opt 

pa rt-t ime 



of 



1 ,6 hou r* 

? * IIP. V_\ S >) c e w orked in. 

e xcced in g 12 m oi i ths 
equival ent to one 
experience 



n peri o d 



as 



the 
of 



experience 



which 



year 

Part-time 



totals lc! 



than 1,600 hours will not be 
accepted by the board. A person 
working less than 35 hours per 
week shall be deemed to be 



working part-time- 



Temporary 
35 



employment shall mean workin 
hours or more per week and shall 
be counted in full . 
(d) Supervision shall mean 



having 



jurisdiction 



(i.e. 



oversight authority) over the 



proces: 



of 



coordinating, 



planning, 



guiding , 



complishments of the employees 
der his or her command; having 
e power of direction and 



activities 



in 
ev 

th 

ac 
un 
th 
de 
ac 
ob 
st 
c!^ 

Ill 
re 
di 
or 
su 
ad 
DJ- 
th 
b_e 
au 
fio 
su 
al 

CO 

su 
fi 
an 
in 



s pecting, controlling, and/or 
aluatinq on a continuing basis 



activities 



and 



cision 



implementi ng 



to 



meet 



the 



ject ives 



of 



his 



her 



ewardship; having authority 

legated by higher management 

hire, transfer, suspend. 



call, promote. 



assig n , 



scharge an employee under his 
her charge or to recommend 
ch action through the proper 
ninistrat ive chain of command, 
rect supervision shall mea n 
e person supervised is next 



low 



in the usual line 



of 



thoritv or is 



staff 



sit ion 
su pervisor , 



re port i ng 



to 



the 



Direct supervision 



so means a clear-cut p ersonal 
nnection to the employee being 



nervised , 



marked 



Jry_ 



rst-hand association without 
intervening position of 
fluence . 



.0402 EXPERIENCE PRIOR TO 

EXAMINATION 
A l t houg h a ce r t ifica te shall 
not- be issued u ntil an applican t 
m e e ts th e e xp er i errvc r e quire d in 
&+ N€Ae OF -rBAB J H- the board may 
pe r mit an appli c ant o th er wis e 
e l igibl e to take its e xamina t ion 
and may i s s u e e xaminati on 
wi t h o u t e x per ien ce o nly 
a p plican t fulfills "the 
edt 



_2J_ gr ades , 



if -the 
following 
r eq uir e men t s . 

( 1 ) He or she must have 
r ec eived at leas t a bachelors 
degree , or may re as o na bly 
e x pect to re ceiv e su c h a 
degree within 9# d ays after 
■the date of the e xa m inati o n, 
e xc e p t a-s sp e cifi ca lly 
ap pro v e d by the b o ard , from 
one o-f the f o ll o wing sc h oo ls ■ 

-fa-)- any c oll ege or univ e r s i t y 
accredited by tire Southern 
Assoc ia t i on of C oll e g e s and 
Sdroolsr or a ooirrparabic 
regional a c cr edit ing 

( b ) any member sc h oo l o-f t h e 
A m e rican Ass e mbly o-f 
C ollegiate Sch o ols of 
Dusin e ss; or 

( c ) any memb e r universi t y o-f 
the Ass o ciation of Ameri c an 
Univers it ies ■ 

( 2 ) he or she must have 
succesfully c omple t ed a 
c o u r s e xxf s t udy in 
a c coun t ancy , or shall 
co mpl ete su c h a co u r s e o-f 
st u dy in acc o untancy at the 
end of the school t erm which 
beg i ns be f ore the e xamina t i o n 
da te , in a school , coll e ge , 



532 



NORTH CAROLINA REGISTER 



or universi t y q ual i f y ing 
rnder 2+ NCA6 6F -HFi02(-H-(n-)-r 
(b ) . and < c ) . A "ccnrrse erf 
study in ac co u irt ancy "- sh all 
mean e i t h er of the followin g ■ 
( a ) an vt n d c r g r a du a t e 

c o nc e n t ra t ion -in accoun t ancy 
c onsis t ing of a l e ast £-4 
s e m e s te r hours , or the 
e q uivalen t in q uar te r mrtrr-s~r 
of tmtfergradtrate accountan c y 
c o urses ; trr 
-Hr> a gradua te c o nc e n t ra t i o n 
•in a c c o untan c y c o nsistin g o-f 
at lea s t +6 s e mes ter hours , 
or "the e q uivalent in quar t er 
hours , o-f study in gr adu ate 
accoun t ancy courses ; a 
g raduate acc o untancy course 
bein g defin e d as an 
a cco un t ancy co urse open 
exclusively to yraclujt a 

under grad rrate arrd g radua t e 
c ourses in accountancy which 
would be eq uival e n t to 2i 
If&Ae 6F t^^» 2 ( 2 ) ( a ) or -fWv 
in rec ogni t i o n of 
differ e nces in the l e v e l of 
graduate and under gr aduat e 
acc o un t an c y co urses , o ne 
seme s ter ( o r q uar t er ) h o ur 
o-f gra dua te s-ttrdy in 
acc o untancy will trc 
considered the e quivalant of 
one and o ne hal f sem e s te r 
(or cj u a r t c r ) hotrrs erf 
undergr aduat e study in 
ac c ountanc y in maltin g the 
compu t e t i o n und er this 
Subs ec ti o n to d e termine if a 
c o mbinat ion o-f g r aduate and 
underg r adua t e s t udy is the 
e quivalen t of 2i N€A€ &¥ 
■ 0402(2H -a-> and ib-»-r 
-(-di The board will accep t 

six semes t er hours , o-r t h e 
equivalent in qua r t e r h o u rs , 
■for i ncome tax c ours e s 
com p l et ed in law schools as 
part of the 2-4 s em e s te r 
h o u r s in a c c o un t in g r e quir e d 
by 2i KGAB &F .0402(2) (a) . 
( 3 ) An appl ic ant who has 

co m p l ete d the course of stud y 
requi r ed by 2+ NSA€ 8F .0 402 
at a sch oo l which do e s rrot 
meet t he r eq uiremen t s of 2+ 
N€Ae 6¥ T-fofr& 2(1 Ha), «-bi or 
( c ) shall he deemed to have 

at a school , c o ll e g e or 

u niversi ty approved by the 

board by : 

( a ) com pl et i o n at a sch oo l 

mee t ing the requir e m e n t s of 

2+ N€A6 BF -r94ti 2(1 )(a), -fbi 

or -tci of h& ad di t i o nal 

semester hour s ■ or the 

e quivalen t in qua rt e r h o urs , 

in c ludin g six s e mes t e r 

hours , or the e quivalen t in 

q uart e r h o urs , of gradua t e 



account ing course s and 
enro l l ment for an advanc e d 
dogreer or 
( b ) comple t ion at a school 
mee t ing the re quir e m e n t s of 
2+ HeAe 6F vfo46 2(1 )(a), -fhi 
or ( c ) of t"5 add it lonai 
sem e s ter hour s , or the 
e quival e n t in qua r ter h o urs 
of unde r gradua be c ourses, 
including six s emeste r 
h ours , or the e qu ivalen t in 
qua rte r hours , of 
undergraduat e c o u r s e s in 
accoun t ancy . 
( 4 ) in cases whe r e an 

accoun t ancy cou s e duplicates 
ano t h er a cco untancy c o urs e 
o nly the semester ( o r 
quar te r ) h o urs of one of the 
c ours e s will he c ou nte d in 
det erminin g if t he appli c an t 
has met the requir e men t s of 
this Rul e in satisfactoril y 
c ompl et in g a co urse of st udy 
m accountancy . 
(a) Ea c h applicant for 

examinat ion submittin g 



education 



credentials 



described in 21 NCAC 8F 
.0302(d) must have proof of 
two years experience in the 

pract ice of public 

accountancy under the direct 
supervision of a certified 

public accountant. Direct 

supervision is defined at 21 
NCAC 8F .0401(d). the other 

e xperi ence requiremen ts 

stated in the statute will 
not be required prior to 
applying to take the exam . 
(b) Each applicant for 

exami n ation submitting 



education 



credentials 



described in 21 NCAC 8F 
.0304 must complete the 

experience requirements 

spe cified in 21 NCAC 8F 
.0401 prior to applying to 
take the CFA examination. 

Notice is hereby given in 
accordance with G.S. 150B-12 
that the State Board of Dental 
Examiners intends to amend 
regulations cited as 21 NCAC 1 6M 
.0001 and 1 6M .0002. 

The proposed effective date of 
this action is February 1> 1987. 

Statutory Authority: G.S. 90-39 
and 90-232. 

The public hearing will be 
conducted at 9:00 a.m. on 
November 15, 1986 at 3325 
Executive Drive, Raleigh, N. C. 
at the offices of the Board. 

Comment Procedures: Persons 
wishing to present oral data, 
views or arguments on a proposed 



NORTH CAROLINA REGISTER 



533 



rule may file a notice with the 
Board at least ten days prior to 
the proposed hearing. Any 
person may also file a written 
submission containing data, 
comments or arguments at any 
time within ten days after the 
hearing . 



CHAPTER 16 



DENTAL EXAMINERS 



SUBCHAPTER 1 6M 



FEES PAYABLE 



.0001 DENTISTS 

The following fees s hall be 
payable -bo "the Nor t h Car o lina 
State D o ard o-f Den t al Cxaninars . 

-fr-H- Applica t ion for- G e ne r al 
Dentistr y 
Examination 075.00 

-(-2-)- Applica t ion fxrr 

Ins tr uc to r ' s Lic e ns e arret 
Examina t ion 050 . 00 

-(-34- G e n e ral Den t is t ry ami 

Ins t ruc t or ' s License 
Renewal 04 .00 

-(-4-)- Ap p lica t i o n for 

Provisional Licensur e — 

G e n er al 

Den t is t ry 050.00 

(5 ) A pplic ati o n f o r I n tern 
P er mi t or renewal 
thereof 050 - 

( ) C o r t i f x c a l - e o-f i-rcernToo 
-bo a r esiden t den t is t 
desir ing a c hang e "bo an ot her 
st a b e or 

t erri t ory no crrg-r 

( 7 ) Licensure upon cl inical 

of 

state 075.00 

-(-64 R e insta t emen t of a 

lic e nse -to r esum e 

prac t ice 050 . 00 

From time to time, the Board 
will establish a schedule of 
fees for license application and 
renewal, as authorized by G.S. 
Section 90-39. A schedule of 
current fees may be obtained 
from the Board's office. 

.0002 DENTAL HYGIENISTS 
The f o llowing fees shall be 
p ayabl e -to -Htc Nor t h Carolina 
S-fc-a-be B o ard of D e n t al Examin e rs ■ 
( 1 ) Appl icat ion for 

e xamination 030.00 

c c rtif it-ai m 025.00 

( 3 ) R e storat i on orf a 

li c ense 030 . 00 

(4 ) A pplication for 
provisional 

licensure 050.00 

-(-54 Certificate -to a r e sid e n t 
dental hygienic b desiring -bo 
c han ge -bo an ot h e r s t a te or 

te rri t ory no chg . 

From time to time, the Board 
will establish a schedule of 
fees for license application and 
renewal, as authorized by G.S. 



Section 90-232. A schedule of 
current fees may be obtained 
from the Board's office. 



Notice is hereby given in 
accordance with G.S. 150B-12 
that the Board of Mortuary 
Science intends to adopt 
regiilation cited as 21 NCAC 34 
.0126. 

The proposed effective date of 
this action is March 1, 1987. 



Statutory Authority: 
90-210. 23(a) . 



G.S 



The 



public hearing will be 



conducted at 10:00 a.m. on 

November 18, 1986 at the Office 

of State Board of Mortuarty 

Science, 412 North Wilmington 

Street, Raleigh, N.C. 27601. 

Comment Procedures: Interested 
persons may present statements 
either orally or in writing at 
the public hearing, or in 
writing prior to the hearing by 
mail addressed to Charles M. 
Phillips, Executive Secretary, 
State Board of Mortuary Science, 
412 North Wilmington Street, 
Raleigh, N.C. 27601 . 

CHAPTER 34 - MORTUARY SCIENCE 



SECTION 



0100 - GENERAL 
PROVISIONS 



.0126 SOLICITATION DEFINED 
Solicitation, as the term is 
used in G.S. 90-21 . 25(e) ( 1 )d, 
shall be interpreted to mean an 
uninvited, intentional, direct 
or indirect contact with the 
family;, next of kin or one who 
has custody of a person who is 
deceased or near death, or with 
a person who is near death, for 
the purpose of procuring the 
right to provide funeral 
services or merchandise, either 
immediately or at a future date, 
for the deceased or the person 
near death . 

TITLE 23 - DEPARTMENT OF 
COMMUNITY COLLEGES 

Notice is hereby given in 
accordance with G.S. 150B-12 
Board of Community 
intends to amend 
cited as 23 NCAC 



that the 
Colleges 
regulation 
2D. 0301 . 



The proposed effective date of 
this action is March 1, 1987. 



Statutory Authority: 
115D-3; 115D-5 and 115D-54, 



G.S, 



534 



NORTH CAROLINA REGISTER 



The public hearing will be 
conducted at 1:00 p.m. on 
November 19, 1936 at Third Floor 
Conference Room, Education 
Building, Raleigh, North 
Carolina 27603-1712. 

Comment Procedures: Any 
interested person may present 



written or 
rclevent to 
NCAC 2D. 0301 
ten minutes 
imposed for 



oral statements 
proposed rule 23 
A time limit of 
per person may be 
oral presentations 
depending upon the number of 
persons making presentations. 
Individuals who plan to make 
oral presentations must give 
their remarks in writing to the 
hearing officer. Written 
statements not to be presented 
at the hearing should be 
directed before November 17, 
1986, to the following address: 
G. Herman Porter, Hearing 
Officer, Department of Community 
Colleges, State Education 
Building, Raleigh, North 
Carolina 27603-1712. 



CHAPTER 2 



COMMUNITY COLLEGES 



SUBCHAPTER 2D - INSTITUTIONS: 
FISCAL AFFAIRS 

SECTION .0300 - BUDGETING: 
ACCOUNTING: FISCAL MANAGEMENT 

.0301 OPERATING BUDGET 

REQUESTS: DISTRIBUTION 
OF FUNDS 

(a) General 

(1) One full-time equivalent 

C FTE ) student represents 
sixteen student membership 
hours per week for 1 1 weeks 
or 176 student membership 
hours for each quarter 
enrolled. Refer to 23 NCAC 
2D .9323 (a) for additional 
information regarding 
calculating and reporting 
student membership hours. 

(2) Rule 23 NCAC 2D .0324 
sets forth the specific 
categories for which FTE 
shall be calculated. The 
operating budget funds 
referred to in this Rule 
refer only to the following 
"regular budget" categories: 
(A) curriculum 

(i) college transfer, 
(ii) general education, 
(iii) technical, 
( iv ) vocational. 
( v ) adul t basic 
e du c at ion . 
(B ) e x t ensi o n cont inuing 
education . 

(i) adult high school, 
(ii) occupational 
extension, 
(iii) other extension, 



(iv) adult basic 
educat ion . 
(3) Projections of full-time 
equivalent (FTE) students 
will be based on the 
following : 

(A) Curriculum FTE 
projections will be based 
on the three-quarter 
t radi t i o nal academic year 
(fall, winter, spring). 

( B ) E x te nsio n Cont in uing 
educat ion FTE projections 
will be based on the full 
four-quarter fiscal year 
(summer, fall, winter, 
spring ) . 

(C) Projections will be 
made, program by program, 
utilizing actual FTE for 
the most recent a 



f ive- 
1 inci 



year 

rr 



period 



usin g a 

regression 



( s t raigh t — line ) p roj e ction 
met h od . 
(D) The State Board may 

adjust the lin e a r 
projections 
based on additional 

to its 



ii o n 
on 
factors brought 
attention . 
(E) The State Board will 



official 
FTE. 

Requests 
Budget 
continuation 



adopt an 
projection of 

(b) Appropriation 

(1) Continuation 
Requests . The 
budget request will be based 
on the number of FTE and 
amount per FTE currently 
appropriated and increases 
in the continuation budget 
as directed by the Office of 
State Budget and Management. 
Also included in the 
continuation budget requests 
will be continuing programs 
that are funded apart from 
the formula budget such as 
new industry, human 
resources development, adul t 
hi g h scho o l . etc . 

(2) Expansion Budget 
Requests. The expansion 
budget request may consist 
of, but is not limited to, 
the following items: 

(A) an adjustment in the 
number of FTEs in existing 
programs based on the 
difference between the 
official FTE projections 
of the State Board and 
the existing level of FTEs 
requested in the 
continuation budget, 

(B) an adjustment in 
expenditure per FTE, 

(C) -additional funding for 
new and special programs 
of instruction tmti -ftrr 
funding FTEs irt t hes e ntrw 
programs . 

(c) Allotment Reserve. A 



NORTH CAROLINA REGISTER 



535 



reserve will be requested from 

the General A ssembly and 

arr,ount nig to one pcrc crrc ox FTEs 
app ro pr ia b-ed for both cur r iculu m 
an d ex te nsion pr o grams shall be 
retained by the State Board for 
the purpose of making later 

allocations for enrollment 

growth , innovative programs, new 
con cepts , etc . 

(d) Formula distribution of 
funds for the operating budget 
will be based on the following 
factors : 

(1) Base allotments 

irtJ Base tjtrcgex s ror eacn 
ins t i t u t i o n shall not be 
based on less cu r ri c ulu m 
or extension FTC 
respec t ively t han fund e d 
the previous fiscal year 
provided -the ac t ual 
curriculum o-r e x t ensi o n 
enrollmen t in -the previ o us 
calendar year did not 
d e clin e bel o w that o-f the 
p r e ceding c al e nda r y e ar . 
Provided fu rt h e r . that th e 
appropr iation o-f 

curriculu m and e xt e nsi o n 
i l jl. rron xne Dciicrai 
Assembly is e qual -to the 
previous years T 

a pp ropr ia t ions o-f FTC . 
(A) Base Budgets for the 
coming fiscal year for 
curriculum programs shall 
be based on the actual 



fall 
FTE, 



FTE , actual winter 



and the 



spring FTE 



p rojecte d 
from the 



current fiscal year . Th e 
projected spring FTE will 



be 



certified 



by 



the 



institutional president at 
the end of the 20 percent 

reporting date . 

education 



Continuing 



programs ' base budget for 
the coming year shall be 
based on the actual spring 
FTE. actual sum m er FTE , 
actual fall FTE, and 
actual winter FTE for the 
latest available 



quarters . 



If sufficient 



FTE is not provided by the 
General Assembly, each 
institution will receive a 
prorata reduction. 
«-&-)- The B ase Budget for 
an i ns t i t u t 
rc f l ei ted a dx 
curriculu m or 
FTE- in the 
calendar y e ar , 
based on a 
rc du c t i u n eq ual 
r eflect e d in the de e l inc , 
pr o vided however , that 
e ach institu t ion shall be 
p rot ec te d to a l e vel or 
9&i in the ini t ial 




all ot ment of the 
p rccec din g fiscal year . 

(B) *E* Additional FTE 
available shall be 
distributed to each 
institution by curriculum 
or e xtensi o n cont inui ng 
education program area on 
a prorata basis of the 
institution's actual FTE 
as comp n r ed to the total 
system FfE . 

(C) The Base Budget for art 
ins t i t u t i o n whi c h hers been 
char t ered for mo r e than 
two years sha ll be 
allo tted funding based on 
no l e ss than 4 FTE based 
upon the prora t a share of 
ac t ual e arn e d FTC for the 
preceding calendar year , 

(C) To the extent the 

projected curriculum FTE 
for the spring quarter 



does 



not 



reflect 



the 



actual srering q u arter FIE, 
adjustments will be made 
to increase or decrea se 
the FTE at the time the 
3/3 Rule adjustments are 
made . 



(D ) To assur e a l e vel of 
FTC equal to that ox 
ac t ual l - calized FTE -fto 
t h e exten t fund s a re 
availabl e ) gr o w t h FTE 
sua 1 1 rre ciis cr luutcct to 
e a c h institu t ion, which in 
the la tes t 3 quar t ers f or 
c urriculum and 4 quarters 
■for ex te nsion . for- which 
data is available , have 
had an increase in TTC xn 
e x ce ss of th e prior year ' s 
uuugereu rrt xn xne 
curriculum or e x te nsi o n 
pr og ram ar e a . 

(D) Institutions whos e 

curriculum enrollement , 



based 



the 



current 



year ' s 



fall 



projected 



qu arter 



to 



reflect 



academic year enrollments 



based 



five-year 



history is projected to 
decline more than three 
percent (3X) of budgeted 
curriculum 



shall 



return 



enrollment , 



to 



the 



irtment of 



Community 



leg es within 30 days of 



not if icat ion 



of 



projected deel inc 



_aOY_ 
the 



fund? 
p ercent 



in excess of three 
(3-:) . 



Institut ions 



whose 



curriculum 



based 



enrollments , 



the 



current 



year s 



fall 



projected 



to 



qua rter 



reflect 



academic year enrollments 



based 



five-year 



history, is projected to 
exceed by three percent 



536 



NORTH CAROLINA REGISTER 



(3X) the 


budqeted 


curriculum 


enrollments 


shall receive additional 


allocat ion 


to fund the 


proiected 


increased 


curriculum 


enrollments . 


insofar as 


funds are 


ava il aisle 


within the 



enrollment accou nt . 
4E+ Ad di t i o nal FTE 

ava liable shall be 

ins t i t u t ion try cur r iculu m 
or exte nsi on p r ogi am area 
cm a prorata basis o~f tTre 
inst itu t ion' s a c tual I"TC . 
(E ) -HH In the event 

sufficient FTE is not 
provided to meet all the 
above provisions in Parts 
A- E C of this Rule, the 
Department will first 
apply Part A. Par+s At Bt 
ami €h- t-f addi t ional 
funds ar e available , Par t-s 
B and E -frm thair o rder o-f 
prior ity ) will bo ap p l i e d . 
(2) Funds will be allotted 
to each institution on the 
following formula: 
(A) instruction 
(i) curriculum 

( I ) instructional unit 
ins t ruc t o r s -- one per 
22 FTE rounded to the 
nearest 1/10 unit 
po si t i o n at the 
currently appropriated 
salary unit value; 
(II) employee benefits 
--based on 

appropriated levels 
for social secrurity, 
retirement, and 
hospitalization ; 
(III) other costs per 
curriculum FTE based 
on appropriated levels 
for travel and 



and 



supplies 
materials ; 
( ii ) ex t ension 
+*+ ins 
— otto p-er 2-2 FTE 
rou nd ed to t+re neares t 
1 / 1 p o si t i o n at- t+re 
rbiry appr o p r ia t ed 
mrit valu e ; 1 
( II ) e mpl oyee benefits 
- — fa a s c d on 

a pp ro pria te d levels 
f o r s o cial security ; 

( II I ) ot-iTCT C o sts 

p e r FTE bas e d 

■for* t ravel 
■s upplies 
ma terials ; 
(ii) continuing 




educat 


ion : 




adult 


b 


asic 


educat 
(I) 


ion : 

inst 


ruct ional 




unit 


— one 


per 


22 


FTE 


roun 


ded 


t 


o the 


nearest 



1/10 unit at the 


currently appropriated 


salary unit value; 


(II) enplovee benefits 


— based on 


appropriated levels 


for social security. 


retirement, and 


hospital izat ion ; 
(III) other costs per 


curriculum FTE based 


on appropriated levels 


for travel and 


supplies and 


materials ; 
(iii) other continuinq 


educat ion 

(I) instructional 


unit--one per 22 FTE 


rounded to the nearest 


1/10 unit at the 


currently appropriated 


salary unit value; 


(II) employee benefits 


--based on 


appropriated levels 


for social security; 
(III) other costs per 


continuinq education 


FIE based on 


appropriated levels 


for travel and 


supplies and 



materials 
(B) instructional support 
and administration: 
(i) A base allotment for 
each institution: 
( I ) salaries- 
president (1.0) on 
president's salary 
schedule; senior 
administrators (4.0) 
at the current salary 
unit value; 
instructional support 
( 3 ) pe rsonn e l ( 2 . G ) at 
the current salary 
unit value; clerical 
personnel ( 3 ) (3.3) at 
the current salary 
unit value; 
(II) employee benefits 
--based on 

appropriated levels 
for social security, 
retirement and 

hospitalization; 
(III) other costs— a 
sum of twenty thousand 
t wo hundred fou r 



dollars 



($20,204) 



t h ir t cen thousand 
dolla r s (013,00 0^ for 
travel for trustees, 
president , 

administrators, and 
support personnel ; 
institutional dues; 
graduation expenses; 
etc . ; 
(ii) An additional 

allotment for each 
curriculum and ex te nsion 



NORTH CAROLINA REGISTER 



537 



continuing education FTE 
for each institution 
will be based on the 
following : 
( I ) Salaries : 

Senior Administrators 
(.04) Positions per 

100 FTE At Current 



Salary 



Administrators 



Scale ; 



of 



Programs 



( . 173) 



Positions 



Curriculum 



pe r 



100 



FTE 



At 



Current Salary Scale 
and (.030) Positions 
per 100 Continuing 



Education 



FTE 



At 



Current Salary Scale; 
Instructional Support 



( .775) 



per 100 Curriculum FTE 



At 



Scale 



Current Sa lary 
( . 552 ) 



and 



Posit ions 



per 



100 



Continuing Education 
FTE At Current Salary 

Scale ; Tech 

/Paraprof essionals 
(.50) Positions per 
100 FTE At Current 
Salary Scale: Cleric al 
personnel - ( . 70 ) 



Positions per 
At Current 



100 FTE 



Salary 



Scale . 

( I ) Salari e s senior 

adminis t ra to rs ; 2rr& 
per 1,250 FTE (to t lis 
n e ar e s t 1/10 po si t i o n ) 
a"r "Wre curren t salary 
tnrrr value ; 

ins tr uctional su p po rt 
personnel ■ G . per 
1 , 00 FT-E -H-tj -Hrc 
neares t 1/10 position ) 
a+ "Hre c urr e n t s alar y 
trrnrt ra lu e ; cl e ri c al 
personnel • . per 
1 , FTE "("tro the 
near e s t 1/10 p o siti o n ) 
trt "the c urr e n t s alary 
unit valu e ; 

(II) employee benefits 
--based on 
appropriated levels 
for social security, 
retirement and 
hospital izat ion; 

(III) other costs per 
FTE based on 
appropriated levels 
for travel, supplies 
and materials, 
postage, printing and 
binding, magazines and 
newspapers, equipment 
repairs, service and 
maintenance contracts, 



advertising 
publicity, etc; 
(IV) JTPA 



ad mini strat ive 
FTE--C lass -size 
projects supported by 



JTPA 


funds 


will 


earn 


budqe 


t 


FTE 


for 


addit 


ional 


allot 


ments 


for 


administr 


ators 



only . 

TITLE 25 - OFFICE OF STATE 
PERSONNEL 

Notice is hereby given in 
accordance with G.S. 150B-12 
that the Office of State 
Personnel intends to amend 
regulation cited as 25 NCAC 1D 
.0504(b)(2). 

The proposed effective date of 
this action is February 1, 1987. 



Positio ns Statutory Authority: G.S. 126-4. 



The public hearing will be 
conducted at 9:00 am on December 
18, 1986 at 101 West Peace, 
Raleigh, North Carolina. 

Comment Procedures: Interested 
persons may present statements 
orally or in writing at the 
hearing or in writing prior to 
the hearing by mail addressed to 
Drake Maynard, Office of State 
Personnel, 116 West Jones 
Street, Raleigh, North Carolina 
27611. 

SUBCHAPTER ID - COMPENSATION 

SECTION .0500 - SEPARATION 

.0504 REDUCTION IN FORCE 
(b) Agency Responsibility. 
(2) It is the employing 

agency's responsibility to 
inform the employee of 
separation as soon as 
possible and to inform the 
employee of the priority 
reemployment consideration 
available. The agency must 
provide employees with a 
minimum of two weak", notice 
of separation. For persons 
desiring priority 

consideration, the releasing 
agency must submit an 
application to the Office of 
State Personnel requesting 
priority consideration. If 
the employee does not want 
assistance in finding 
another State job, the 
agency should get a written 
statement to this effect and 
share a copy with the Office 
of State Personnel. 



and Notice is hereby given in 



accordance with G.S. 150B-12 
that the Office of State 
Personnel intends to repeal 
regulations cited as 25 NCAC ID 
.0507 and .0508. 



538 



NORTH CAROLINA REGISTER 



The proposed effective date of 
this action is February 1, 1987. 



may decline 


a lower level 


posit ion 


and retain 


el iqibil itv 


for severance 



Statutory 
126-5. 



Authority : 



G.S. 



The public hearing will be 
conducted at 9:00 am on December 
18, 1986 at 101 West Peace 
Street. Raleigh, North Carolina. 

Comment Procedures : Interested 
persons may present statements 
orally or in writing at the 
hearing or in writing prior to 
the hearing by mail addressed to 
Drake Maynard. Office of State 
Personnel, 116 West Jones 
Street, Raleigh, North Carolina 
27611 . 

.0507 PRIORITY REEMPLOYMENT 

CONSIDERATION (REPEALED) 

.0508 PRIORITY REEMPLOYMENT 
CONSIDERATION: 
(EFF. JULY 1, 1985) 
(REPEALED) 



Notice is hereby given in 
accordance with G.S. 150B-12 
that the Office of State 
Personnel intends to amend 
regulation cited as 25 NCAC ID 
.0509(1)(f), (2)(a)(ii), (2)(g), 
(2)(i) and (3) . 

The proposed effective date of 
this action is February 1, 1987. 



Statutory Authority: 
126-4(10); 143-27.2. 



G.S. 



The public hearing will be 
conducted at 9:00 am on December 
18, 1986 at 101 West Peace 
Street, Raleigh, North Carolina. 

Comment Procedures: Interested 
persons may present statements 
orally or in writing at the 
hearing or in writing prior to 
the hearing by mail addressed to 
Drake Maynard, Office of State 
Personnel, 116 West Jones 
Street, Raleigh, North Carolina 
2761 1 . 

.0509 SEVERANCE SALARY 

CONTINUATION 
(1) Eligible Employees 

(f) Perm a nent employees, 
sched u led to bo separated by 

reduct ion- in -force. may 

accept a temporary state 
position and remain elig i ble 
to receive severance salary 
continuation in accord with 
this policy. 

(g) A permanent employee 
s cheduled to be separated 
through reduct ion-in-force 



salary continuation. 
(2) Amount and Method of 
Payment 
(a)" 

(ii) Age Adjustment Factor 
For e mployees wh-o exc e ed 
4-0 years erf age . 2 . 5>; trf 
the annual bas e salary 
will ire add e d -f-or- e ach 
ye-a-r o v er 4-& years o-f age 
n ot -to exceed 2+ years 
( a ge 61). Employees 
qualify for the age 
adjustment factor at 40 
years of age . To compute 
the amount of the 
adjustment, 2.5X of the 
annual base salary will be 
added for each full year 
over 39 years of age not 
to exceed 22 years (age 
61). In the event an 
employee is not eligible 
for either social security 
benefits or retirement 
benefits under the 
Teachers' and State 
Employees' Retirement 
System, the employee may 
receive credit for age 
beyond age 61 . The total 
age adjustment factor 
payment is limited by the 
service payment and cannot 
exceed the total service 
payment . 

Note: At age 62, a career 
employee is usually 
eligible for social 
security benefits as well 
as benefits under the 
Teachers' and State 
Employees' Retirement 
System both of which have 
been contributed to by the 
State. 

Exainpl e « Age 03 ; Salary 
2 4 , Q-0 0/year ; £0 y e a r s 
Co mpu t a t ion 

(a ) Service fac t or ■ 
frg-OOO^ m o n t h f-o-r 4 m on t hs 

(b ) Atre adjus t men t 
f a ct o r: 0-2<-Ofr9- x .025 x 
(61 40) •» 01 2 600 

However . the age 
adjustm e n t fac t o r c ann ot 
e xc ee d t+re s e rvice fa cto r 
■s-o t he ag e fac t or irs 
limi t ed t-o 00 00 . Th e 
t ot al p aymen t -rs 016,000 
dis tr ibu t ed over 4- mo n t hs . 
Exampl e: Age 63; Salary - 
$24, 000/year; 20 years 
Computation 
(a^ Service factor: 

$2000/month for 4 months 

= $8000. 
(b) Age adjustment 

factor: $24000 x .025 x 

(61-39) = $13.200. 



NORTH CAROLINA REGISTER 



539 



However, the age 
adjustment factor cannot 
exceed the service factor 
so the age factor is 



limited to $8000 



The 



total payment is $16,000 
distributed over 4 months. 
(f) An employee who is 

reemployed i n any permanent 
position with the State 
while receiving severance 
salary continuation will no 
longer be eligible for such 
pay effective on the date of 
reemployment . The 

reemploying agency shall be 
responsible for determining 
if the former employee is 
receiving severance salary 
continuation payments. 
(i) Funds for severance 

salary continuation will be 
provided as directed by the 
Office of State Budget. 
G.S. 143-27.2 provides that 
severance wages are 
authorized by the Director 
of the Budget, upon written 
request of a state agency 
and with recommendation by 
the State Personnel 
Director. AH severance 
paymen t s ar e co n t ingen t up o n 
•Htc availabili t y erf funds . 
■fcf funds arc rrcrt suffici e n t 
for full paymen t ■fct> all 
employe e s , dis tr ibuti o n erf 
a v ailabl e funds should be on 
a pro — ra-ta basis s u ch thtrt 
all empl o yees wo uld r ece iv e 
a pro — r a te d p aym e n t -im 
a ccor danc e wi t h t h e i r agr? 
and s e rvi c e ■ in cases where 
■thr? a ge ncy -is no t paying the 
full am o un t , -the agency 
shall submi t documen t at ion 
signed try -the agency head txr 
the S t at e Personnel Dir e c tor 
and the State Budge t 
Dir e c t or . 
(3) For employees who receive 
severance salary 

continuation, agencies shall 
indicate on the separation 
form, Forms PD-105, the 
amount and calculation of 
such payments. 



Notice is hereby given in 
accordance with G.S. 150B-12 
that the Office of State 
Personnel intends to adopt 
regulations cited as 25 NCAC ID 
.0510; .0511; .0512; .0513; 
.0514; .0515; .0516 and .0517. 

The proposed effective date of 
this action is February 1, 1987. 

Statutory Authority: G.S. 126-5. 

The public hearing will be 
conducted at 9:00 a.m. on 



December 18, 1986 at 101 West 
Peace Street, Raleigh, North 
Carolina . 

Comment Procedures : Interested 
persons may present statements 
orally or in writing at the 
hearing or in writing prior to 
the hearing by mail addressed to 
Drake Maynard, Office of State 
Personnel, 116 West Jones 
Street, Raleigh, North Carolina 
2761 1 . 

.0510 PRIORITY REEMPLOYMENT 
CONSIDERATION 

(a) Priority reemployment 
consideration shall be provided 
to: 

( 1 ) Employees who have met 
the minimum service 
requirements for permanent 
status and who occupy or 
accept and are subsequently 
separated, for reasons other 
than just cause, from 
positions designated exempt 
as confidential or 
policy-making pursuant to 
G.S. 126-5(c)(2) and G.S. 
126-5(d)(1 ) . 

(2) Employees separated due 
to shortage of funds or 
work, abolishment of a 
position or other material 
changes in duties or 
organization by the process 
commonly known as 
reduct ion-in-f orce . An 
employee who is separated at 
the end of a time-limited 
appointment is not eligible 
for priority consideration. 

(b) In affording priority 
reemployment consideration, 
employees separated from 
policy-making/ confidential 
exempt positions for reasons 
other than cause shall receive 
first priority over employees 
separated by reduction-in-force . 

(c) The intent of priority 
consideration for employees 
separated from exempt positions 
is to enable a return to the 
career service at a salary grade 
equal to that held in the most 
recent subject position. For 
employees separated through 
reduct ion-in-f orce , the intent 
is to restore employment at a 
salary grade equal to that held 
prior to separation. In either 
instance, the salary grade and 
not the salary rate is the 
controlling factor. 

.0511 REDUCTION IN FORCE 

PRIORITY CONSIDERATION 

Employees separated through 
reduction in force shall receive 
priority reemployment 

consideration for a period of 



540 



NORTH CAROLINA REGISTER 



twelve months. The following 
conditions apply: 

(1) Within the agency or 
institution where the 
separation occurred (parent 
agency). an employee 
separated through reduction 
in force shall be offered any 
available vacant position of 
a salary grade level equal or 
below that held before 
separation, provided the 
employee meets the 
qualifications for the 
position and could perform 
the job in a reasonable 
length of time, including 
normal orientation and 
training given any new 
employee. The only exception 
preventing an offer in this 
instance would be the 
preexistence of an 
"understudy" who had been 
groomed by the agency to fill 
the vacant position, within a 
formally understood, written 
arrangement , and structured 
plan of development . 

(2) Within all other State 
agencies and institutions, 
the employee shall be 
interviewed, and where 
qualified for the vacant 
position, shall be offered 
the position prior to 
employing anyone who is not a 
permanent employee . 

(3) An employee separated 
through reduct ion-in-f orce 
must claim priority 
reemployment consideration at 
the time of separation 
through notification to the 
parent agency or institution 
personnel office or the 
priority is forfeited. 

(4) For employees separated 
from trainee or flat-rate 
positions, who are eligible 
for priority reemployment 
consideration, the salary 
grade for which priority is 
to be afforded shall be 
determined as follows. For 
employees in flat rate 
positions, the salary grade 
level shall be the salary 
grade which has as its 
mid-point (Step 5B ) , a rate 
equal to the flat rate salary 
of the eligible employee. 
For employees in trainee 
status the salary grade level 
shall be the salary grade of 
the full class . 

(5) An employee separated 
through rcduction-in-f orce 
while actively possessing 
priority reemployment 
consideration shall retain 
the current priority for the 
remainder of the twelve month 
priority period. A new 



priority period shall then be 
afforded at the salary grade 
and status of the most recent 
separation. The length of 
this additional priority 
period shall be equal to the 
time between the expiration 
dates of the old and the new 
priority, assuming that the 
second twelve month period 
started on the date of the 
most recent separation. 

(6) Priority reemployment 
consideration will not be 
afforded to an employee who , 
after receiving formal notice 
of impending 
reduct ion-in-f orce , retires 
or applies for retirement 
prior to the separation date. 
An employee who applies for 
retirement after being 
separated through 
reduct ion-in-f orce may 
exercise priority 
reemployment consideration. 

(7) Priority reemployment 
consideration is intended to 
provide a return to 
employment at an equal 
employment status to that 
held at the time of 
separation. Acceptance of a 
position at a lower 
appointment status will not 
affect priority. Employees 
separated from permanent 
full-time positions shall 
have priority to permanent 
full-time and permanent 
part-time positions. 
Employees separated from 
permanent part-time positions 
shall have priority to 
permanent part-time positions 
only . 

(8) Employees who have 
priority reemployment status 
at the time of application 
for a vacant position, and 
who apply during the 
designated agency recruitment 
period, will be continued as 
priority applicants until the 
selection process is 
complete . 

(9) An employee scheduled to 
be separated through 
reduct ion-in-force may 
decline a position at a lower 
level and retain his/her 
priority . 

(10) An employee scheduled to 
be separated through 
reduct ion-in-f orce , or with 
priority status, may not 
decline interviews or offers 
for positions within 35 miles 
of the employee's original 
work station without losing 
his/her priority, if the 
position is at an appointment 
status and salary grade equal 



NORTH CAROLINA REGISTER 



541 



to or greater than that held 
at the time of separation. 

(11) An employee with priority 
reemployment consideration 
may accept, in accordance 
with his/her priority, a 
permanent full-time or 
permanent part-time state 
position at a salary grade 
lower than that held at the 
time of separation, or a 
temporary position at any 
level, and retain such 
consideration for the 
remainder of the twelve 
months priority period. 

(12) An employee with priority 
reemployment consideration 
may accept employment outside 
state government or in a 
state position not subject to 
the State Personnel Act and 
retain such consideration 
through the twelve months 
priority period. 

(13) Priority reemployment 
consideration is considered 
to be satisfied and is 
terminated when an employee 
separated or scheduled to be 
separated accepts a position 
equal to or greater than the 
salary grade level and 
employment status of the 
position from which separated 
or an employee's period of 
twelve months priority 
reemployment consideration 
ends . 

.0512 POLICY-MAKING/ 

CONFIDENTIAL EXEMPT 
PRIORITY CONSIDERATION 
(a) Employees removed from 
policy-making/ confident ial 
exempt positions. for reasons 
other than cause, shall receive 
priority reemployment 

consideration as follows: 

(1) An eligible employee with 
10 or more years cumulative 
service in subject 
positions, including the 
immediately preceding 12 
months prior to placement in 
an exempt position, shall be 
reassigned to a subject 
position within the same 
department or agency, or if 
necessary within another 
agency, at the same grade 
and step as his/her most 
recent subject position. 
The reassignment must be 
within a 35 mile radius of 
the exempt position from 
which separated. If an 
employee is offered a 
reassignment which meets 
these criteria and refuses 
to accept, the priority is 
terminated . 

(2) An eligible employee 



who has the minimum service 
requirements for permanent 
status [G.S. 126-5(c)(1 )], 
but less than 1 years 
cumulative service in 
subject positions prior to 
placement in an exempt 
position, shall be permitted 
a one-time reemployment 
priority, to be exercised by 
the employee within one year 
following the effective date 
of his/her separation. Upon 
notice to the agency that 
priority is being requested, 
the employee shall be 
offered any available, 
non-exempt position for 
which he/she has formally 
applied and is qualified 
for, when the position 
applied for is equal to or 
below the salary grade of 
the most recent subject 
position held prior to 
separation; provided, 
however, that a prior offer 
may be made to a person 
qualified under Section 1 
above, or to a current state 
employee with greater 
cumulative state service. 

(b) As exercised by the 
employee, this priority 
consideration shall expire when 
a formal offer is extended for 
employment in the position being 
applied for. A vacant position 
will not be considered 
available, for purposes of this 
policy, if an "understudy" has 
been groomed by the agency to 
fill it, under a pre-existing, 
formally understood, written 
arrangement , within a structured 
plan of development . 

(c) If an eligible policy- 
making exempt employee applies 
for and accepts a position 
through the regular, non 
priority selection process, 
which is at a salary grade below 
that held in his/her most recent 
subject position, that person 
shall retain the one-time 
priority for higher level 
positions for the remainder of 
the twelve month period. 

(d) If an eligible person 
accepts employment outside State 
Government, the one-time 
priority shall be continued 
through the one-year maxiumum at 
the person's request. 

.0513 CUMULATIVE STATE SERVICE 
Cumulative service is the total 
amount of state service in 
positions subject to the State 
Personnel Act . It is not 
necessary that this service be 
cont inuous . 

.0514 REEMPLOYMENT AFTER 



542 



NORTH CAROLINA REGISTER 



PRIORITY EXPIRATION 
If an appointment has not been 
received within the one year 
priority period, a person 
previously eligible for priority 
reemployment will be considered 
for reemployment under regular 
applicant procedures. 

.0515 AGENCY RESPONSIBILITIES 

(a) It is the employing 
aqency's responsibility to 
inform the employee of 
separation as soon as possible 
and to inform the employee of 
the priority reemployment 
consideration to be afforded. 
If the employee does not want 
assistance in finding another 
State job, the agency should get 
a written statement to that 
effect, and file a copy with the 
Office of State Personnel . For 
employees wishing to claim 
priority reemployment 
consideration, the separating 
agency must submit an 
application to the Office of 
State Personnel requesting 
priority consideration. The 
application may be submitted as 
soon as the separation is known , 
and designated as 
"rcduct ion-in-f orce" or 
"policy-making exempt". 

(b) It is also an agency 
responsibility to notify the 
Office of State Personnel in 
writing when : 

( 1 ) An eligible person 

accepts a position which 
satisfied his/her priority 
reemployment consideration. 

(2) A person separated by 
reduct ion-in-f orce is 
offered a lateral transfer 
or promotion and refuses, 
unless the position offered 
is more than thirty-five 
miles from the employee's 
original work station. 

(3) An eligible employee 
separated from a 
policy-making or 
confidential exempt position 
exercises his/her priority 
and then refuses an 
employment offer. 

(4) Other conditions which 
would satisfy or terminate 
an eligible employee's 
priority reemployment 
consideration are 
discovered . 

.0516 OFFICE OF STATE 

PERSONNEL RESPONSIBILITY 

(a) The Office of State 
Personnel will maintain the 
names and applications of 
eligible persons and will 
provide a priority referral 
system which places eligibles 
before agencies and institutions 



with available vacancies, such 
that priority consideration may 
be granted. 

(b) The Office of State 
Personnel will also provide 
outplacement assistance to 
separated employees who wish to 
seek employment in the private 
sector. Such assistance will 
typically include resume 
preparation, personal marketing, 
and interview skills, along with 
Employment Security Commission 
coordination for placement 
referral . 

.0517 LEAVE AND SALARY 
INCREASES 

(a) Vacation Leave. Employees 
are paid in a lump sum for 
accumulated vacation leave. 

(b) Sick Leave. Accumulated 
sick leave at the time of 
separation shall be reinstated 
if reemployment occurs within 
three years . 

(c) Lcave-Uithout-Pay Option. 
To enable additional benefits, 
employees scheduled to be 
separated shall, upon their 
request, be placed in a 
leave-without-pay status. 

(d) Salary Increases. If 
reemployed during the twelve 
month period, time earned toward 
a salary increase shall be 
considered in determining 
eligibility for the next 
increase . 



TITLE 26 - OFFICE OF 

ADMINISTRATIVE HEARINGS 

Notice is hereby given in 
accordance with G.S. 150B-12 
that the Office of 
Administrative Hearings intends 
to adopt regulations cited as 26 
04 .0001-. 0008. 

The proposed effective date of 
this action is February 1, 1987. 

Statutory Authority: G.S. 
7A-751; 150B-11. 

The public hearing will be 
conducted at 10.00 a.m. on 
November 14, 1986 at 706-08 
Hillsborough Street, Board of 
Nursing Conference Room, Second 
Floor, Raleigh NC 27603. 

Comment Procedures: Data, 
opinions, and arguments 
concerning these rules must be 
submitted by November 14, 1986 
to the Office of Administrative 
Hearings, P. 0. Drawer 11666, 
Raleigh, NC 27604, Attn: Sharon 
Morris . 

CHAPTER 4 - 706 DEFERRAL 



NORTH CAROLINA REGISTER 



543 



.0001 INTRODUCTION 

(a) The Equal Employment 
Opportunity Commission (EEOC) 
designated the North Carolina 
State Office of Administrative 
Hearings as a 706 Deferral 
Agency effective August 27, 
1986. The North Carolina 
General Assembly has designated 
the Office of Administrative 
Hearings as the State's 706 
Deferral Agency in G.S. 7A-751. 

(b) The Office of 
Administrative Hearings ( OAH ) 
hereby accepts deferral by the 
EEOC over the following classes 
of charges filed with the EEOC 
in North Carolina: 

All charges alleging race, 
color, sex, religion, or 
national origin discrimination 
in employment, or retaliation 
for opposition to such alleged 
discrimination, filed by 
previous and current state 
employees or applicants for 
employment who were or are 
subject to North Carolina 
General Statutes Section 126-16 
and Article 8 of Chapter 126, 
North Carolina General Statutes, 
which have been filed with the 
EEOC within the time limits set 
forth in North Carolina General 
Statutes Section 126-38. 

.0002 CONTENT AND PROCEDURE 

(a) Any person wishing to file 
a complaint as defined in 
Paragraph (b) of Rule .0001 of 
alleged discrimination with the 
EEOC shall address a petition 
to: 

District Director 

EEOC 

5500 Central Avenue 

Charlotte, N. C. 28212 

(b) The petition shall include 
the following information: 

(1) Full name, address and 
telephone number (work and 
home ) , of person making the 
charge ; 

(2) Full name and address of 
person or agency against 
whom the charge is made (the 
respondent ) ; 

(3) A clear and concise 
statement of the facts, 
including pertinent dates, 
constituting the alleged 
unlawful employment 
practices . 

(A) A statement of specific 
harm and dates the harm 
occured ; 

(B) For each harm - a 
statement specifying the 
act, policy or practice 
which is alleged to be 
unlawful ; 



(4) For each act, policy or 
practice alleged a statement 
of the facts which lead the 
person to believe the act, 
policy or practice is 
discriminatory; 

(5) The approximate number of 
employees of the respondent 
employer; 

(6) A statement disclosing 
whether proceedings 
involving the alleged 
unlawful employment 
practices have been 
commenced before a state or 
local agency charged with 
the enforcement of fair 
employment practice laws and 
if so, the date of such 
commencement and the name of 
the agency; 

(7) Notwithstanding the other 
provisions of this 
Subsection (b), a charge is 
sufficient when the 
commission receives from the 
person making the charge a 
written statement 
sufficiently precise to 
identify the parties and to 
describe the action 
complained of. 

(c) The EEOC will examine the 
petition and determine its 
appropriateness. If appropriate, 
it will be assigned an EEOC 
docket number and forwarded to 
the Office of Administrative 
Hearings, the designated 706 
deferral agency. 

(d) The OAH will assess the 
case to determine if within its 
authority. If so, the case will 
be assigned an OAH docket 
number. If the case is not 
within OAH's authority the case 
will be returned to EEOC. 

.0003 NOTIFICATION OF 
INVESTIGATION 

(a) Upon a determination to 
investigate a case the OAH will 
notify the complainant and the 
respondent that an investigation 
will be commenced. 

(b) Any person involved in a 
case wishing to submit 
information regarding the case 
must do so through written 
correspondence and sent to: 

Director of Mediation Services 

Office of Administrative 

Hearings 

P. 0. Drawer 11666 

Raleigh, N.C. 27604 

The correspondence must state 
the names of complainant and the 
respondent and the OAH docket 
number . 

.0004 ADDITIONAL INFORMATION 
Persons desiring information in 



544 



NORTH CAROLINA REGISTER 



addition to that provided in a 
particular case may contact: 

Division of Mediation Services 

Office of Administrative 

Hearings 

P. 0. Drawer 11666 

Raleigh, N.C. 27604 

.0005 INVESTIGATION 

(a) All deferred cases 
received by OAH will be assigned 
to an OAH Mediation Specialist. 

(b) The Mediation Specialist 
will conduct a comprehensive 
investigation of the charges, 
interviewing the charging party, 
appropriate agency personnel and 
any nccesary witnesses. The 
Mediation Specialist will 
subpeona, seek and obtain copies 
of all pertinent policies and 
documents from the agency and 
charging party. 

Cc) The investigation will be 
conducted in a timely manner. 

.0006 INVESTIGATION REPORT 

(a) An investigation report 
will be prepared examining the 
allegations in the deferral 
charge and applying the 
information produced during the 
invest igat ion . 

(b) The Mediation Specialist 
will determine whether there is 
probable "Cause" or "No Cause" 
to believe the alleged 
discrimination has occurred. 

(c) If the investigation 
results in a "No cause" 
determination the report will be 
forwarded to the complainant, 
respondent and EEOC where this 
is OAH's final action. 

(d) If the investigation 
results in a "Cause" 
determination the deferral will 
go to the conciliation and 
settlement stage. 



.0007 CONCILIATION AND 
SETTLEMENT 

(a) The Mediation Specialist 
will contact the complainant and 
agency personnel to discuss the 
findings of the investigation 
and attempt a settlement of the 
deferral . 

Cb) Upon reaching a settlement 
constituting full relief and is 
acceptable to both parties, the 
settlement documentation shall 
be forwarded to the EEOC along 
with the case file. 

(c) Having determined that a 
settlement cannot be readied 
within thirty days after 
distribution of the 
investigation report, the case 
shall be forwarded to the 
Administrative Law Judges for a 
contested case proceedings. 

.0008 HEARING 

(a) A hearing before an 
Administrative Lav; Judge of the 
Office of Administrative 
Hearings will be conducted. 

(b) The Administrative Law 
Judge will forward a recommended 
decision to the complainant and 
the respondent . 

(c) If a settlement acceptable 
to both parties is reached the 
case is resolved. 

(d) Upon settlement a copy of 
the documentation shall be sent 
to EEOC along with the case 
file. 

(e) If a settlement 
constituting full relief cannot 
be readied the Investigation 
Report, the Administrative Law 
Judge's recommended decision and 
the case file will be forwarded 
to EEOC for resolution. 



NORTH CAROLINA REGISTER 



545 



FINAL RULES 

When the text of any adopted 
rule differs from the text of 
that rule as proposed, the text 
of the adopted rule is published 
in this section. 

When the text of any adopted 
rule is identical to the text of 
that as proposed, adoption of 
the rule will be noted in the 
"List of Rules Affected" and the 
text of the adopted rule will 
not be republished. 

Adopted rules filed by the 
Departments of Correction, 
Revenue and Transportation are 
published in this section. 
These departments are not 
subject to the provisions of 
G.S. 150B, Article 2 requiring 
publication of proposed rules. 

TITLE 19A - TRANSPORTATION 

SUBCHAPTER 2B - HIGHWAY PLANNING 

SECTION .0100 - RIGHT OF WAY 

.0143 THE SALE OF SURPLUS 
LANDS 

(a) Department of 
Transportation policy relative 
to disposal of remainder 
properties acquired in 
connection with acquisition of 
right of way is as follows: 

(1 ) The sale of all 
residues will be by public 
sale except as hereinafter 
specified . 

(2) Residue properties sold 
by public sale are to be 
sold by either sealed bid, 
or by auction at the 
election of the right of way 
branch. The sale of such 
properties must be 
advertised by publication in 
a newspaper having general 
circulation in the county in 
which the property is 
situated. After opening 
bids or closing of auction, 
no upset bids will be 
considered. The high bid 
shall be presented to the 
Department of Transportation 
at its next regular meeting 
after the date of the sale 
for rejection or acceptance. 
The Department of 
Transportation reserves the 
right to reject all bids. 

(3) Those residue properties 
located adjacent to 
controlled access projects 
that are landlocked may be 
sold to the adjoining 
property owner by 



negotiation rather than 
public sale for a 
consideration not less than 
the appraised value of the 
residue . 

(4) Residue properties may be 
sold to state agencies and 
institutions and other 
governmental units by 
negotiation rather than 
public sale for a 
consideration not less than 
the appraised value of the 
residue . 

(5) Residue property 
acquired in connection with 
right of way for a project 
may be used for the purpose 
of exchange in part or full 
consideration for right of 
way being acquired from 
another property owner on 
the project. Such exchanges 
to be based on the appraised 
values of the residue 
property and the right of 
way to be acquired. 

(6) Residues which have an 
area of one-half acre or 
less or a value of one 
thousand dollars ($1,000) or 
less and the highest and 
best use is for assemblage 
with adjacent property may 
be sold without advertising 
by negotiations to an 
adjoining owner. The 
Property Management Unit 
together with an area 
appraiser will determine the 
value of the residue based 
on its after value as 
indicated in the original 
appraisal, sales of similar 
properties and sales of 
other residues, if any, in 
the area. After a value has 
been established, the State 
Property Manager may 
negotiate with the adjoining 
owners concerning the 
disposal of each residue. 
The decision of the State 
Property Manager to accept 
and complete a sale is 
final . 

(7) The Manager of Right of 
Way is delegated authority 
to dispose of residues with 
appraised values of less 
than one hundred dollars 
($100.00) by executing and 
delivering on behalf of the 
Department of 
Transportation, a quit claim 
deed to the buyers of such 
residues, after the 
transactions are first 
approved by the Board of 
Transportation. Conveyances 
of residues with appraised 
values of less than one 
hundred dollars ($100.00) 
shall not require the 



546 



NORTH CAROLINA REGISTER 



approval of the Governor and 

Council of State, 
(b) Should the Department of 
Transportation purchase a 
property in its entirety for 
right of way purposes and at a 
later date reduce the right of 
way, thus creating a residue, 
the original owner shall bo 
offered the first refusal to 
purchase the residue. The 
purchase price is to be 
negotiated with the former owner 
or other prospective buyers 
taking into consideration the 
purchase price paid by the 
Department of Transportation, 
the current value of the 



property, and the proportionate 
part of the entire tract being 
retained by the Department of 
Transportation. In the event 
the former owner does not desire 
to repurchase the residue area, 
the residue shall be offered for 
sale at public sale with the 
right reserved to reject all 
bids. 

History Note: Statutory 
Authority G.S. 136-18(2); 
136-19; 143B-350(f ), (g); 
Eff . July 1 , 1978; 
Amended Eff. November 1, 1986; 
August 1, 1982. 



NORTH CAROLINA REGISTER 



547 



NORTH CAROLINA ADMINISTRATIVE CODE 
LIST OF RULES AFFECTED 



EDITION X, NO. 7 

AGENCY 

ADMINISTRATION 

1 NCAC 21D 



GOVERNOR'S OFFICE 

9 NCAC 2 



HUMAN RESOURCES 



EFFECTIVE: October 1. 1986 
ACTION TAKEN 



,0100-. 1000 



10 



Eff. August 25, 1986 
Transferred and Recodified 
as: 15 NCAC 15 .0100-. 1000 



EXECUTIVE ORDER NO. 26 
Eff. July 23, 1986 



NCAC 7A 


.0101 




Amended 




.0401 




Amended 




.0501- 


.0502 


Temp . Adopted 


7B 


.0102- 


.0103 


Amended 




.0212 




Adopted 




.0335 




Amended 




.0406 




Amended 


10D 


.0702 




Amended 




. 1005 




Amended 




. 1616 




Amended 




. 1625 




Amended 




.2512 




Adopted 


10F 


.0001- 


.0002 


Amended 




.0029 




Amended 




.0030- 


.0035 


Amended 




.0039 




Amended 




.0041 




Amended 


11 


.0705 




Amended 


12 


.0236 




Amended 




.0239 




Amended 


26D 


.0001- 


0002 


Amended 




.0004 




Amended 



INSURANCE 
1 1 



NCAC 



JUSTICE 

12 NCAC 4A 
4C 



.0200 



,0101 
,0208- 



.0209 



Eff. August 14, 1986 
Transferred and Recodified 
as: 11 NCAC 11G .0001-. 0008 



Amended 
Amended 



NATURAL RESOURCES AND COMMUNITY DEVELOPMENT 

15 NCAC 10F .0351 Adopted 

17C .0002 Amended 



OCCUPATIONAL 
21 



LICENSING 
NCAC 8G 
16A 

16B 



16C 



16D 
16H 
16N 



^BOARDS 
.0404 
.0001 

.0002-. 0003 
.0201 
.0307-. 0309 
.0310-. 0314 
.0315 
.0316 
.0304 

.0306-. 0307 
.0310 
.0202 
.0104 
.0103 
.0201 
.0304 
.0401-. 0403 



Amended 

Amended 

Repealed 

Amended 

Amended 

Repealed 

Amended 

Adopted 

Amended 

Amended 

Amended 

Repealed 

Amended 

Amended 

Amended 

Amended 

Amended 



548 



NORTH CAROLINA REGISTER 





.0503- 




.0508 




.0603 




.0605 


16P 


.0001- 


32H 


. 1004 


38 


.0306- 


50 


.0108 



,0505 Amended 

Amended 
Amended 
Amended 

0004 Amended 

Adopted 

0307 Adopted 

Amended 



NORTH CAROLINA REGISTER 549 



TITLE/MAJOR DIVISIONS OF THE NORTH CAROLINA ADMINISTRATIVE CODE 

TITLE DEPARTMENT 

1 Administration , Department of 

2 Agriculture, Department of 

3 Auditor , Department of State 

4 Commerce, Department of 

5 Corrections, Department of 

6 Council of State 

7 Cultural Resources, Department 

8 Elections, State Board of 

9 Governor 

10 Human Resources, Department of 

11 Insurance, Department of 

12 Justice, Department of 

13 Labor, Department of 

1 4A Crime Control, Department of 

15 Natural Resources and Community Development 

16 Education, Department of 

17 Revenue, Department of 

18 Secretary of State 

1 9A Transportation, Department of 

20 Treasurer, Department of State 

•21 Occupational Licensing Boards 

22 Administrative Procedures 

23 Community Colleges, Department of 

24 Independent Agencies 

25 Personnel , Department of State 

26 Office of Administrative Hearings 

NOTE: Title 21 contains the chapters of the various 
occupational licensing boards. 

CHAPTER LICENSING BOARD 

2 Architecture, Board of 

4 Auctioneers, Commission for 

6 Barber Examiners, Board of 

8 Certified Public Accountant Examiners 

10 Chiropractic Examiners, Board of 
12 Contractors, Licensing Board for 
14 Cosmetic Art Examiners, Board of 
16 Dental Examiners, Board of 

18 Electrical Contractors, Board of Examiners 

20 Foresters, Board of Registration for 

21 Geologists, Board of 

22 Hearing Aid Dealers and Fitters Board 

26 Landscape Architects, Licensing Board of 

28 Landscape Contractors, Registration Board of 

30 Law Examiners, Board of 

31 Martial & Family Therapy Certification Board 

32 Medical Examiners, Board of 

33 Midwifery Joint Committee 

34 Mortuary Science, Board of 

36 Nursing, Board of 

37 Nursing Home Administrators, Board of 

38 Occupational Therapist, Board of 
40 Opticians, Board of 

42 Optometry, Board of Examiners in 

44 Osteopathic Examination and Registration 

46 Pharmacy, Board of 

48 Physical Therapy, Examining Committee of 

50 Plumbing and Heating Contractors, Board of 

52 Podiatry Examiners, Board of 

53 Practicing Counselors, Board of 

54 Practicing Psychologists , Board of 

56 Professional Engineers and Land Surveyors 

58 Real Estate Commission 

60 Refrigeration Examiners, Board of 

bl Sanitarian Examiners. Board of 

64 Speech and Language Pathologist s and 

Audiologists , Board of Examiners of 

66 Veterinary Medical Board 

550 NORTH CAROLINA REGISTER 



CUMULATIVE INDEX 
(April 1. 1986 - March 31, 1987) 



1986 
Pages Issue 

1-73 April 

74-97 May 

93-132 June 

133 - 222 July 

223 - 379 August 

380 - 415 September 

416 - 553 October 

A0 - Administrative Order 

C - Correction 

E - Errata 

E0 - Executive Order 

FDL - Final Decision Letters 

FR - Final Rule 

GS - General Statute 

JO - Judicial Order 

LRA - List of Rules Affected 

M _ Miscellaneous 

PR - Proposed Rule 

SO - Statements of Organization 

TR - Temporary Rule 

ADMINISTRATION 
Office of Marine Affairs, 382 PR 
Purchase and Contract , 423 PR 
State Employees Combined Campaign, 430 PR 

ADMINISTRATIVE ORDERS 
Beecher Reynolds Gray, 47 A0 
Fred Gilbert Morrison, Jr., 48 AO 
Angela Rebecca Bryant, 49 AO 
Thomas R. West, 50 AO 
Abraham Penn Jones, 98 AO 
Administrative Law Judges. 248 AO 
Margaret Eugenia Rogers, 419 AO 
Kenneth Wayne Patterson, 420 AO 

AGRICULTURE 
Dept . of Agriculture, 250 SO 

Food and Drug Protection Division, 99 PR, 255 PR 
Plant Industry, 256 PR 

COMMERCE 
Milk Commission, 74 PR, 135 PR. 260 PR 
Savings and Loan, 78 PR 

COMMUNITY COLLEGES 
Community Colleges, 210 PR, 534 PR 

CORRECTION 
Division of Prisons, 213 FR , 347 FR 

CULTURAL RESOURCES 
Archives and History, 78 PR 
Battleship Commission, 338 PR 
Roanoke Voyages and Eliz. II. 261 PR 

EXECUTIVE ORDERS 
Executive Orders 1-25, 23 EO; 26. 247 EO ; 27, 416 E0; 28, 417 EO 

FINAL DECISION LETTERS 
Voting Rights Act, 249 FDL. 421 FDL 

NORTH CAROLINA REGISTER 551 






GENERAL STATUTES 
Chapter 7A, 21 GS, 244 GS 
Chapter 150B, 3 GS, 226 GS , 380 C 
Chapter 1028, 223 GS 

HUMAN RESOURCES 
Child Day Care, 281 PR 
Children Services, 103 PR 
Facility Services, 270 PR 
Food Assistance, 103 PR 

Health Services, 169 PR, 388 PR, 434 PR 
Individual and Family Support, 103 PR 
Medical Assistance, 181 PR, 389 PR, 501 PR 
Medical Care Commission, 433 PR 
Medical Services, 101 PR 
Mental Health Retardation 

and Substance Abuse, 80 PR, 298 PR, 350 FR, 380 C 
Social Services, 390 PR 
Youth Services, 85 PR, 309 PR 

INSURANCE 
Agency Services, 313 PR 
Company Operations, 503 PR 
Engineering and Building, 321 PR 
Fire and Casualty, 501 PR 

JUDICIAL ORDERS 
Appointment 
Robert A. Melott, 45 JO 

JUSTICE 
Education and Training Standards, 322 PR 
Police and Information Network, 107 PR 
Sheriff's Education, 332 PR 

LABOR 
Boiler and Pressure Vessel, 86 PR, 189 PR, 338 PR 
Elevator Division, 517 PR 

LICENSING BOARD 
C P A Examiners, 112 PR, 133 SO, 529 PR 
Dental Examiners, 399 PR, 533 PR 
Medical Examiners, 92 PR, 399 PR 
Midwifery Joint Committee, 422 SO 
Mortuary Science, 534 PR 
Nursing, 422 SO 
Occupational Therapy, 206 PR 
Pharmacy, 208 PR 

Plumbing and Heating Contractors, 116 PR 
Real Estate Commission, 401 PR 
Veterinary Medical Board, 341 PR 

LIST OF RULES AFFECTED 
Volume 10, No. 1 
(April 1, 1986), 71 LRA 
Volume 10, No . 2 
(May 1 , 1986), 94 LRA 
Volume 10, No . 3 
(June 1 , 1986) , 127 LRA 
Volume 10, NO. 4 
(July 1 , 1986), 217 LRA 
Volume 10, No . 5 
(August 1, 1986), 374 LRA 
Volume 10, No. 6 
(September 1, 1986), 410 LRA 
Volume 10, No. 7 
(October 1, 1986), 548 LRA 

MISCELLANEOUS 
Federal Rule Amendment, 381 M 

NATURAL RESOURCES AND COMMUNITY DEVELOPMENT 
Natural Resources and Comunity Development, 133 SO 

552 NORTH CAROLINA REGISTER 



Coastal Management, 112 FR, 401 FR 
Departmental Rules, 109 PR, 1 1 8 FR 
Economic Opportunities, 528 PR 
Employmcntal and Training, 111 PR 

Environmental Management, 88 PR, 190 PR, 339 PR, 396 PR, 520 PR 
Forest Resources, 126 FR 
Marine Fisheries, 191 PR 
Soil and Water, 90 PR, 521 PR 
Wastewater Treatment, 397 PR 

Wildlife Resources and Water Safety, 110 PR, 205 PR, 340 PR, 398 PR, 
422 SO, 527 PR 

OFFICE OF ADMINISTRATIVE HEARINGS 
Office of Administrative Hearings, 51 SO 
General, 52 PR, 345 PR 

Hearings Division, 61 PR, 345 PR, 369 FR 
Rules Division. 52 PR, 367 FR 
706 Deferral, 543 PR 

REVENUE 
Corporate Income Tax, 350 FR 
Individual Income Tax, 351 FR 
Intangible Tax, 366 FR 
Sales & Use Tax, 363 FR 

SECRETARY OF STATE 
Notary Public, 91 PR, 367 FR 

STATE PERSONNEL 
State Personnel Commission, 343 PR, 538 PR 

STATE TREASURER 
Local Government Commission, 529 PR 

STATEMENTS OF ORGANIZATION 
Agriculture, 250 SO 
CPA Examiners, 133 SO 
Midwifery Joint Committee, 422 SO 

Natural Resources and Community Development, 133 SO 
Nursing, 422 SO 

Office of Administrative Hearings, 51 SO 
Wildlife Resources Commission, 422 SO 

TRANSPORTATION 
Department of Transportation, 213 FR, 367 FR, 546 FR 



NORTH CAROLINA REGISTER 553 



W9LZ nui|0JB3 quoN -qSpiEy 
9991 1 J3MEJCI O d 

sSuuedH aAijBJjsiuiiupv jo aaijJO 



H3H 

WIS 
)Vld 



FOLD HERE 



NORTH CAROLINA REGISTER AND ADMINISTRATIVE COD1 

ORDER FORM 



Please enter my subscription for the North Carolina Register to start with the 
($95.00/year subscription) 



Please enter my subscription for the NCAC in microfiche form starting with the ediLv 

(Published in March and October: $40.00 per edition) 

Renew North Carolina Register □ Renew NCAC 

Check Enclosed O Please bill me 

ease make checks payable to Office of Administrative Hearings 

VME ADDRESS 

TY STATE ZIP 

[ONE 

eturn to Office of Administrative Hearings - fold at line, staple at bottom and affix postage.) 



CHANGE OF ADDRESS: 



Present Address 



NAME 



ADDRESS 



CITY 



STATE 



ZIP 



2. New Address 



NAME 



ADDRESS 



CITY 



STATE 



ZIP 



TRa, 

Dr : strative Hearings 

^604 













?0 ( 



23933 



URST CLASS 



University of Nort-h r 

Law Library Carolina at 

Van Hecke-Wettach 064-A 
Chapel Hill, N.C. 27514